EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914054
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.
Gameco Pty Ltd applied for a TCO in respect of certain coalescing elements on 28 April 2009.
Instrument
TCO No 0914054 was made on 24 July 2009. It declares that those certain coalescing elements 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. 0914054 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 Tariff Concession Instrument No. 0914054 was enacted in 2009 under the Customs Act 1901 to facilitate tariff concessions for specific goods that meet certain criteria. This instrument addresses the need for streamlined processes to grant tariff concessions, ensuring that goods which are not produced in Australia and for which no substitutable goods are available domestically, can be imported at a lower rate of customs duty. The Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs, who must be satisfied that the application for the concession meets the core criteria outlined in the Act. The policy objective of this legislation is to provide tariff relief for specific imported goods, thereby supporting industries that rely on the importation of non-domestically produced items.
The enactment of this legislation by the Australian Government through the relevant legislature aimed to provide a clear and effective mechanism for granting tariff concessions, ensuring that the process is transparent and fair. By reducing the customs duty on certain imported goods, the Act helps to promote trade and economic efficiency by making essential products more affordable for businesses and consumers. This, in turn, supports the broader economic policy objectives of fostering competitive markets and facilitating international trade.
Scope and Application
The Tariff Concession Instrument No. 0914054, made under the Customs Act 1901, applies to specific coalescing elements that are subject to a Tariff Concession Order (TCO). The Act governs the process by which the Chief Executive Officer (CEO) of Customs may grant a TCO, allowing for a lower rate of customs duty on goods that meet the criteria set out in the legislation. An application for a TCO can be made by any person, and if the CEO is satisfied that the application is valid and meets the core criteria, a TCO is made, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The geographic reach of this Act is national, as it is a Commonwealth Act. The CEO must ensure no substitutable goods were produced in Australia in the ordinary course of business, and the TCO applies to the entire country. The application of this Act is not restricted by any exclusions, exemptions, or thresholds specified in the explanatory statement, although it does rely on the broader definitions and criteria provided in the Customs Act 1901 and the Customs Tariff Act 1995. The application of the Act may be extended or restricted through subordinate instruments, which would need to be referenced for a complete understanding of its application.
Key Provisions
The key operative sections of the Customs Act 1901 that are relevant to the creation and operation of Tariff Concession Orders (TCO) include sections 269F, 269C, 269B, 269D, 269E, 269P(3), and 269K(1). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B provides definitions for terms like 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order (TCO) that declares the goods subject to the application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Lastly, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
The Act imposes several obligations on the parties involved. Firstly, it mandates that the CEO must decide whether a TCO application meets the core criteria by assessing whether substitutable goods were produced in Australia on the day the application was lodged. If the application meets the criteria, the CEO is required to make a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who considers the TCO should not be made. The applicant for the TCO must ensure their application is valid and meets the core criteria as outlined in the Act. The Act also requires the CEO to ensure that the TCO does not affect the rights of any person other than the Commonwealth in a disadvantageous way.
Breaches of the provisions under the Customs Act 1901, including those related to TCOs, can result in civil or criminal consequences. For instance, if a person knowingly or recklessly makes a false statement in an application for a TCO, they can be subject to penalties. The maximum penalty for a corporation is generally higher than that for an individual, reflecting the potential scale of operations and impact. The specifics of penalties can vary based on the nature and severity of the breach, but they are designed to enforce compliance with the Act and its associated regulations.
The Tariff Concession Order No. 0914054 specifically declares that certain coalescing elements are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods. This order came into effect on the day the application was lodged, 28 April 2009. The order ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the date the TCO came into force. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth and does not disadvantage any person by affecting their rights as at the date of registration.