EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913733
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.
Tiwest Pty Ltd applied for a TCO in respect of certain chemical mixing plant on 23 April 2009.
Instrument
TCO No 0913733 was made on 10 July 2009. It declares that those certain chemical mixing plant 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. 0913733 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 Australian Parliament, was designed to provide a framework for managing customs and excise duties. It introduced the possibility of Tariff Concession Orders (TCOs) under Part XVA, which allow the Chief Executive Officer of Customs to reduce or exempt customs duty on certain goods. This mechanism was introduced to address the gap where businesses sought tariff reductions to remain competitive, particularly when there were no domestic alternatives. The policy objective is to support industries that rely on imported goods, thereby promoting economic efficiency and competitiveness. Instrument TCO No. 0913733, made on 10 July 2009, is an example of this mechanism in action, as it granted a tariff concession on certain chemical mixing plant applied for by Tiwest Pty Ltd on 23 April 2009. The concession was granted because no substitutable goods were produced in Australia, resulting in a reduction of the duty rate from 5% to free. The concession came into effect on the date the application was lodged, 23 April 2009, and no submissions were received against the concession, indicating broad acceptance of the decision.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity that seeks to import goods into Australia and qualifies under the Act's provisions. The primary focus is on goods for which a TCO can be applied to, provided they are not specified in section 269SJ, which excludes certain goods from this concession. The geographic reach of the Act is national, as it applies across Australia, affecting all importers and the goods they bring into the country. The Act stipulates that a TCO can only be granted if, at the time of application, no substitutable goods are being produced in Australia, as defined by sections 269D, 269E, and 269F. Once the CEO determines that an application meets the core criteria, they must issue a TCO, which declares the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby reducing the duty rate. The instrument made under this Act, Tariff Concession Instrument No. 0913733, came into force on the date the application was lodged, in this case, 23 April 2009. The Act allows for further application and interpretation through subordinate instruments, extending its reach and applicability.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0913733 include section 269C, which outlines the core criteria that a Tariff Concession Order (TCO) application must meet, and section 269F, which provides the process for applying for a TCO (sections 269C and 269F). Section 269C requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269F details the application process to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, a TCO is made, as per section 269P(3).
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to publish a notice in the Gazette inviting submissions if the TCO application is accepted as valid, as per subsection 269K(1) (subsection 269K(1)). In this instance, the CEO published a notice inviting submissions but did not receive any. Additionally, the CEO must decide whether the TCO application meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C. If the CEO is satisfied that the application meets these criteria, a TCO must be made, as per section 269P(3).
The legislation also outlines consequences for breaches, although no specific offences or penalties are mentioned within the text provided. Generally, under the Customs Act 1901, breaches of customs regulations can lead to civil and criminal penalties. Civil penalties can include fines, while criminal penalties can include imprisonment, reflecting the severity of non-compliance with customs laws (general understanding of the Customs Act 1901). The exact penalties would depend on the specific nature and severity of the breach, as outlined in other sections of the Customs Act and related regulations.