EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914057
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 filter parts on 28 April 2009.
Instrument
TCO No 0914057 was made on 24 July 2009. It declares that those certain coalescing filter parts 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. 0914057 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 was enacted to provide a framework for the administration of customs and excise duties, among other things. Part XVA of the Act establishes the mechanism for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on specified goods. Enacted by the Australian Parliament, this legislative instrument aims to facilitate trade by reducing the cost of imported goods, thereby encouraging economic efficiency and competitive pricing in the market. The policy objective behind issuing a TCO, such as Tariff Concession Order No. 0914057, is to provide relief from customs duties for goods that are not produced domestically or for which no suitable domestic substitutes are available. This particular order, issued on 24 July 2009, was made in response to an application by Gameco Pty Ltd for certain coalescing filter parts, resulting in a tariff concession that reduced the duty on these goods from 5% to free, effective from 28 April 2009.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions for goods imported into Australia. Specifically, Part XVA of the Act governs the process by which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that reduce customs duty rates on specified goods. This legislation allows for the application of lower duty rates to goods that meet certain criteria, such as the absence of substitutable goods produced in Australia. The Act's scope extends to all goods that are subject to the Customs Tariff, with the exception of those explicitly excluded under section 269SJ. The instrument TCO No. 0914057, made on 24 July 2009, illustrates the application of this process to certain coalescing filter parts, reducing their duty rate from 5% to free. The Act's jurisdiction covers the entire Commonwealth of Australia, and its application is further defined through subordinate instruments such as the Customs Tariff Act 1995 and associated regulations. The TCO does not adversely affect any pre-existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0914057 under the Customs Act 1901 (section 269C) pertain to the application and approval process for a Tariff Concession Order (TCO). A person can apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods (section 269F). If the CEO determines that the application does not relate to goods specified in section 269SJ of the Act, the CEO must assess whether the application meets the core criteria. If satisfied, the CEO must issue a written order (a TCO) stating that the goods in question are subject to a prescribed rate in the Customs Tariff Act 1995 (section 269P(3)). In this case, Instrument TCO No. 0914057, made on 24 July 2009, declared that certain coalescing filter parts are goods to which item 50 of Schedule 4 to the Tariff applies, as no substitutable goods were produced in Australia. This resulted in a reduced duty rate of free, as opposed to the general rate of 5%.
The obligations and requirements imposed by the Customs Act 1901 on parties applying for a TCO include ensuring that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must also verify that no substitutable goods are produced in Australia, as outlined in section 269C. The CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, as required by subsection 269K(1). The CEO must consider these submissions before making a decision. In this instance, no submissions were received. A TCO is deemed to have come into effect on the day the application was lodged, as stated in subsection 269S(1), meaning TCO No. 0914057 is effective from 28 April 2009.
The Customs Act 1901 sets out specific consequences for breaches related to Tariff Concession Orders. However, the explanatory statement does not provide explicit information on the penalties for non-compliance with the Act's provisions. Generally, breaches of the Customs Act 1901 can result in civil and criminal penalties, including fines and imprisonment. The maximum penalties can vary depending on the nature and severity of the breach. For example, knowingly making a false statement in an application for a TCO could lead to a fine of up to $22,200 or imprisonment for up to two years, or both, under section 269U. Additionally, failure to comply with the Act's requirements could result in the invalidation of the TCO and potential financial repercussions for the applicant.