EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912990
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.
Boc Limited applied for a TCO in respect of certain fuelling station on 20 April 2009.
Instrument
TCO No 0912990 was made on 10 July 2009. It declares that those certain fuelling station 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. 0912990 is taken to have come into force on 20 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 Tariff Concession Instrument No. 0912990, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods. This legislation allows for a lower rate of customs duty on goods specified in a Tariff Concession Order (TCO), provided certain criteria are met. The Instrument was initiated following an application by Boc Limited for a TCO concerning certain fuelling stations, and it was made on 10 July 2009. The policy objective, as outlined in the Act, is to ensure that goods for which a TCO is sought are not substitutable by goods produced in Australia, thereby benefiting importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO was deemed to come into force on 20 April 2009. The process includes a requirement for the Chief Executive Officer of Customs to consult with the public and no submissions were received in opposition to this particular TCO.
Scope and Application
The Tariff Concession Instrument No. 0912990 under the Customs Act 1901 applies to specific goods, in this case, certain fuelling stations, which are subject to a Tariff Concession Order (TCO). The primary purpose of this legislation is to allow the Chief Executive Officer of Customs to grant tariff concessions, effectively lowering the customs duty on specified goods. This applies to Boc Limited's application for tariff concessions on certain fuelling stations made on 20 April 2009, which was subsequently granted on 10 July 2009. The instrument was implemented to ensure that no substitutable goods were produced in Australia, thereby qualifying for the concession. The concession reduces the general rate of duty from 5% to free, benefitting importers who can apply for duty refunds on imports of these goods from the date the TCO was lodged. The application of the TCO is nationwide, falling under the Commonwealth's jurisdiction, and it does not disadvantage any person or impose new liabilities on anyone except the Commonwealth, particularly protecting the rights of importers.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs, as outlined in section 269F. A TCO applies a lower rate of customs duty to the specified goods. For an application to be considered, it must not pertain to goods that are explicitly prohibited from TCOs under section 269SJ. The CEO evaluates the application against the core criteria set out in section 269C, which requires that, on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. This definition of "substitutable goods" is elaborated in sections 269D, 269E, and 269F of the Act.
The obligations imposed on the parties by the Act are primarily on the CEO, who must ensure that the application for a TCO is valid and meets the core criteria. The CEO must publish a notice in the Gazette, as required by subsection 269K(1), inviting submissions from any person who believes there are reasons why the TCO should not be made. If no submissions are received, the CEO proceeds to make the written TCO order, specifying the reduced customs duty rate, as per subsection 269P(3). In the case of Boc Limited, the CEO issued TCO No. 0912990 on 10 July 2009, after being satisfied that no substitutable goods were produced in Australia for the fuelling stations in question.
Failure to comply with the requirements set out in the Customs Act 1901 can result in various consequences. Section 273A of the Act provides that any person who makes a false or misleading statement in an application for a TCO commits an offence. The maximum penalty for this offence is 2,500 penalty units or imprisonment for five years, or both. Additionally, section 273B imposes a civil penalty of up to 1,250 penalty units for each day the contravention continues after the person is first aware of the contravention. The Act also includes provisions for the imposition of fines and other penalties for non-compliance, with specific maximum penalties provided for certain breaches.
The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, as stipulated in subsection 269S(1). Importers, however, benefit from the TCO as they can apply for a refund of duty on goods imported since the TCO was taken to have come into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, safeguarding against any retrospective liabilities arising from actions taken before the TCO was registered.