EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915961
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.
Wizard Power Pty Ltd applied for a TCO in respect of certain ovens mirror laminating on 11 May 2009.
Instrument
TCO No 0915961 was made on 31 July 2009. It declares that those certain ovens mirror laminating 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. 0915961 is taken to have come into force on 11 May 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 application of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. The Act was introduced to address the need for a mechanism to grant concessions on customs duties for certain goods, thereby facilitating trade and economic activity by reducing the cost of importing specific goods. The Tariff Concession Instrument No. 0915961, made on 31 July 2009, applies to certain ovens mirror laminating and grants a concession on the customs duty applicable to these goods, reducing the rate from 5% to free. The instrument was made following an application by Wizard Power Pty Ltd and after the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. The TCO aims to provide a benefit to importers by potentially allowing them to apply for a refund of duty on goods imported since the day the concession was taken to have come into force.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of tariffs on goods entering Australia, and includes provisions for Tariff Concession Orders (TCOs) under section 269F. These orders allow for the application of lower rates of customs duty on specified goods, provided that certain criteria are met. The Act applies to any person who wishes to apply for a TCO, and the Chief Executive Officer of Customs (CEO) is the authority responsible for deciding whether an application meets the required core criteria, as outlined in sections 269C and 269SJ of the Act. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections to the making of a TCO. The TCO scheme has a national reach, applying across all jurisdictions in Australia, and is not restricted by state or territory boundaries. The Explanatory Statement for TCO No. 0915961, which concerns certain ovens mirror laminating, confirms that the CEO was satisfied that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was made, and that the TCO has no retrospective effect on the rights of any person, except to the benefit of importers who can apply for a refund of duty on goods imported since the day the TCO came into force.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0915961, establishes a framework for Tariff Concession Orders (TCOs) under section 269F (1). These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met. Specifically, an applicant can apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning particular goods. The CEO must assess if the application meets the core criteria, as outlined in sections 269C and 269SJ. For instance, section 269C states that a TCO application is eligible if no substitutable goods are produced in Australia on the date the application was lodged.
The obligations under the Act are significant for both the CEO and the applicant. For the CEO, the primary responsibility is to determine if the application complies with the core criteria, particularly focusing on whether substitutable goods are produced in Australia. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO. The applicant, meanwhile, must ensure that their application is complete and accurate, providing all necessary information to substantiate their claim that no substitutable goods are produced in Australia. Furthermore, the CEO is required to publish a notice in the Gazette under section 269K(1), inviting any interested parties to submit objections or submissions regarding the TCO.
Failing to comply with the Act's requirements can lead to various consequences. Under the Customs Act 1901, breaches may result in civil or criminal penalties. For example, section 269O of the Act provides for penalties, including fines and imprisonment, for false or misleading statements made in an application for a TCO. Additionally, any party found to be in non-compliance with the terms of the TCO may face further penalties, including financial penalties or other sanctions as deemed appropriate by the court. The specifics of penalties, including maximum fines and imprisonment terms, are detailed within the Act and its associated regulations.