EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911881
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
SS Enclosur Pty Ltd applied for a TCO in respect of certain protection enclosures on 08 April 2009.
Instrument
TCO No 0911881 was made on 29 June 2009. It declares that those certain protection enclosures are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0911881 is taken to have come into force on 08 April 2009.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted by the Australian Parliament to regulate the importation and exportation of goods. In response to a need for flexibility in customs duties, Part XVA was introduced to allow the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which can provide reduced or free customs duty on specified goods. This mechanism was created to encourage the importation of goods where local production is not viable, thereby supporting trade and economic growth. The Tariff Concession Instrument No. 0911881, made on 29 June 2009, exemplifies this provision by granting tariff concessions for certain protection enclosures, following an application by SS Enclosur Pty Ltd. The objective of this specific TCO was to ensure that these goods, which were not being produced in Australia, could be imported without incurring the usual customs duty, thereby facilitating their availability in the market and potentially stimulating related industries.
Scope and Application
The Tariff Concession Instrument No. 0911881 under the Customs Act 1901 applies to entities or individuals who seek tariff concessions on certain goods, specifically those that are not substitutable by goods produced in Australia. The instrument was created in response to an application by SS Enclosur Pty Ltd for tariff concessions on certain protection enclosures, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia. The application process involves meeting core criteria as outlined in the Customs Act, including the absence of substitutable goods in Australia, which must be verified on the day the application is lodged. The instrument grants a tariff concession, reducing the duty on the specified goods from the general rate of 5% to free, effective from the date the application was lodged, in this case, 8 April 2009. This legislative instrument operates within the Commonwealth jurisdiction and does not disadvantage any person by affecting their rights as of the registration date or impose liabilities for actions taken prior to the registration. Importers of the goods in question may benefit by applying for a refund of duties paid on the goods imported since the effective date of the tariff concession.
Key Provisions
The Tariff Concession Instrument No. 0911881 pertains to the Customs Act 1901 and establishes specific provisions regarding Tariff Concession Orders (TCOs). Under section 269F, a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in relation to particular goods. If the CEO determines that the application does not concern goods specified in section 269SJ, which lists goods ineligible for TCOs, they must then assess whether the application meets the core criteria outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they are mandated to issue a written TCO.
Section 269C stipulates that an application meets the core criteria if, on the day it was submitted, no substitutable goods were being produced in Australia in the ordinary course of business. Definitions for key terms like 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. The CEO must also consider subsection 269P(3), which requires the issuance of a written TCO if the application meets the core criteria.
The obligations imposed by the Act on the CEO include the duty to review applications for TCOs, to determine if they meet the core criteria, and to make a written TCO if they do. The CEO is also required to publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO if they believe it should not be made, as per subsection 269K(1). In the case of TCO No. 0911881, no submissions were received in response to the published notice. The TCO is effective from the date the application was lodged, according to subsection 269S(1).
Failure to comply with the provisions of the Customs Act 1901 can result in legal consequences. For instance, incorrect issuance of a TCO might lead to civil or criminal penalties depending on the nature and extent of the breach. While the explanatory statement does not specify maximum penalties, breaches of the Customs Act generally can result in fines and imprisonment, reflecting the seriousness with which the Act is enforced.