EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912993
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.
Adi Munitions Pty Ltd applied for a TCO in respect of certain ammunition tracer on 20 April 2009.
Instrument
TCO No 0912993 was made on 10 July 2009. It declares that those certain ammunition tracer 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. 0912993 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. 0912993, enacted in 2009 under the Customs Act 1901, addresses the problem of ensuring that certain goods, in this case specific ammunition tracers, receive tariff concessions when no substitutable goods are produced domestically. This instrument was introduced by the Chief Executive Officer of Customs, following an application by Adi Munitions Pty Ltd, and aims to provide a tariff concession where appropriate, enhancing the competitive position of Australian importers of such goods. The policy objective is to facilitate trade by reducing customs duty on specific imported goods, thereby promoting economic efficiency and supporting the import industry without disadvantaging existing stakeholders. The instrument ensures that the rights of importers are beneficially affected, with no retroactive liabilities imposed on any party, while allowing for the refund of duties paid on the specified goods since the instrument's effective date.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The primary application of this Act is to individuals or entities seeking to import goods that are eligible for tariff concessions. These concessions are granted under specific criteria, notably when the goods in question are not produced in Australia in the ordinary course of business and have no substitutable goods available domestically. The geographic reach of this legislation is national, as it applies across all states and territories of Australia. The Act excludes certain goods from eligibility for a TCO as specified in section 269SJ, ensuring that the concessions do not undermine domestic production. The application process involves an initial application to the CEO, who then determines the eligibility based on the core criteria set out in section 269C of the Act. The TCOs can be further refined or expanded through subordinate instruments, allowing for flexibility and responsiveness to changing economic conditions or trade practices.
Key Provisions
The Tariff Concession Instrument No. 0912993 (the Instrument) operates under section 269F of the Customs Act 1901 (the Act), allowing the Chief Executive Officer of Customs (the CEO) to make a Tariff Concession Order (TCO) for certain goods. When the CEO is satisfied that an application for a TCO meets the core criteria, as outlined in sections 269B and 269C, the CEO must make a written order declaring the goods in question as subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). This Instrument, TCO No. 0912993, was made on 10 July 2009, declaring that certain ammunition tracers are goods to which item 50 of Schedule 4 to the Tariff applies, and hence subject to a duty rate of free, down from the general rate of 5%.
Under the Act, the CEO has an obligation to assess whether an application for a TCO meets the core criteria (section 269C) and to make a TCO if the criteria are satisfied (subsection 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). The CEO is further required to ensure that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO in respect of anything done or omitted before the TCO came into force (subsection 269S(1)). In this case, the CEO did not receive any submissions in response to the Gazette notice, and the TCO does not impose any liabilities on any person.
The Act imposes several obligations on the parties involved. The applicant must submit an application that meets the core criteria for a TCO, and the CEO must assess the application and decide whether to make a TCO. If a TCO is made, the CEO must publish a notice in the Gazette inviting submissions, and the CEO must ensure that the TCO does not adversely affect the rights of any person in respect of anything done or omitted before the TCO came into force. Importers of the goods subject to the TCO will benefit from being able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Breaching the obligations under the Act can result in various consequences. Although specific offences, penalties, or civil/criminal consequences are not detailed in this Instrument, general provisions in the Customs Act 1901 and related legislation could apply. These may include fines, imprisonment, or other penalties for non-compliance with the Act or regulations. The maximum penalties will depend on the specific breach and the relevant legislation.