EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913961
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.
Chemring Australia applied for a TCO in respect of certain bomb disrupter power cartridges on 28 April 2009.
Instrument
TCO No 0913961 was made on 10 July 2009. It declares that those certain bomb disrupter power cartridges 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. 0913961 is taken to have come into force on 28 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, provides a framework for the regulation of imports and exports through customs duty and other measures. One component of this regulatory scheme is the provision for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs to reduce the customs duty on certain goods. The Tariff Concession Instrument No. 0913961 was introduced to provide tariff concessions for specific goods, in this case, certain bomb disrupter power cartridges, which were applied for by Chemring Australia. The policy objective of this instrument, as stated, is to ensure that no substitutable goods are produced in Australia, thereby allowing for the concession to be granted under section 269C of the Act. The instrument came into force on the date the application was lodged, 28 April 2009, and does not disadvantage any person or impose new liabilities on anyone except the Commonwealth.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities that seek a TCO for goods that are not specified as excluded under section 269SJ. The application process necessitates that the goods in question are not substitutable by products manufactured domestically, as stipulated under sections 269C, 269D, and 269E. Once an application meets these core criteria, a TCO is issued, effectively applying a concessional rate of customs duty to the specified goods, as outlined in Schedule 4 of the Customs Tariff Act 1995. This legislative framework operates across the Commonwealth of Australia, with the TCO affecting the rights of importers positively by allowing duty refunds for imports since the TCO's effective date, without imposing any additional liabilities on non-Commonwealth entities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0913961 are sections 269C, 269P(3), and 269S(1) of the Customs Act 1901. Section 269C specifies the core criteria that a Tariff Concession Order (TCO) application must meet, particularly focusing on whether substitutable goods are produced in Australia. Section 269P(3) mandates the Chief Executive Officer of Customs (CEO) to issue a written order if the application satisfies the core criteria. Section 269S(1) sets the effective date of the TCO as the day the application is lodged. This particular TCO, No. 0913961, applies to certain bomb disrupter power cartridges and grants them a concession under item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods.
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269F allows any person to apply for a TCO for goods, provided the goods are not specified in section 269SJ, which lists those that cannot be subject to a TCO. The CEO, upon receiving a valid application, must determine if the application meets the core criteria set out in section 269C. This involves verifying that no substitutable goods are produced in Australia on the date the application is lodged. Furthermore, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who might have reasons to oppose the TCO. If no submissions are received, the CEO can proceed to issue the TCO.
Breaching the obligations under this Act can lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, it is implied that failing to comply with the requirements for a TCO application or providing false information could result in legal action. The Customs Act 1901, which governs these provisions, includes general penalties for non-compliance with customs regulations, which can encompass fines, imprisonment, or both. The exact penalties would be determined by the specific breach and applicable sections of the Act.
The TCO itself does not impose any liabilities on any person and does not affect the rights of individuals or entities as at the date of registration. However, it does benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. This ensures that importers are not disadvantaged and can take advantage of the tariff concession provided by the TCO.