EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913561
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.
Santos Pty Ltd applied for a TCO in respect of certain bypass clamp on 23 April 2009.
Instrument
TCO No 0913561 was made on 10 July 2009. It declares that those certain bypass clamp 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. 0913561 is taken to have come into force on 23 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, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties. Specifically, Part XVA of the Act outlines the procedure for Tariff Concession Orders (TCOs), which allow for reduced rates of customs duty on certain goods. This mechanism was introduced to address the need for providing relief to Australian importers by reducing the duty on goods that are not produced domestically, thus promoting competition and economic efficiency. The enactment body responsible for issuing these orders is the Chief Executive Officer of Customs, who must ensure that applications meet specific criteria, such as the absence of substitutable goods produced in Australia. The policy objective behind these concessions is to support Australian industries by ensuring that imported goods do not undercut local production, thereby maintaining a fair competitive environment. The Explanatory Statement for Tariff Concession Instrument No. 0913561 illustrates this process, detailing the application by Santos Pty Ltd for a TCO on bypass clamps, which was granted as no equivalent goods were produced in Australia, resulting in a duty reduction from 5% to free.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, specifically addressing the application and granting of Tariff Concession Orders (TCOs). This Act allows the Chief Executive Officer of Customs to reduce customs duty on certain goods if specified criteria are met, such as the absence of substitutable goods produced in Australia. The Act's application extends to the entire Commonwealth of Australia, ensuring that the rules governing tariff concessions are uniformly applied across the nation. Any exclusions or specific limitations are detailed in section 269SJ of the Act, which lists goods ineligible for TCOs. The legislation also provides for the possibility of further defining terms and conditions through subordinate instruments, thereby allowing for flexibility and adaptation to changing economic conditions. Importantly, the Act ensures that the rights of non-Commonwealth persons are protected, meaning that the implementation of a TCO does not retroactively disadvantage anyone or impose liabilities for actions taken prior to the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0913561 under the Customs Act 1901 (section 269F) allow for the application of tariff concessions on certain goods, specifically bypass clamps in this instance. If the Chief Executive Officer (CEO) of Customs is satisfied that the application for a Tariff Concession Order (TCO) meets the core criteria outlined in section 269C, they are required to make a written order declaring that the goods in question are subject to a specific item in the Customs Tariff Act 1995. In this case, item 50 of Schedule 4 to the Tariff, which reduces the duty from the general rate of 5% to free duty.
The obligations imposed by the Act on parties or entities governed by it include the requirement for applicants to ensure their applications meet the core criteria (section 269C), which involves proving that no substitutable goods are produced in Australia (section 269D). The CEO must then publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (section 269K). The CEO must also ensure that no substitutable goods are produced in Australia as of the day the application was lodged (section 269P).
Failure to comply with the provisions of the Customs Act 1901 can result in civil or criminal consequences. Under section 186 of the Customs Act, a person who contravenes the Act may be liable to a penalty. For instance, providing false or misleading information in an application for a TCO could result in a fine or imprisonment. The maximum penalty for a civil contravention is generally outlined in the relevant sections of the Act, with significant fines and potential imprisonment terms for more serious breaches. The specifics of penalties are not detailed in the explanatory statement but would be found in the relevant sections of the Customs Act 1901.