EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918155
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.
Firesense Pty Ltd applied for a TCO in respect of certain waterflow activated switches on 28 May 2009.
Instrument
TCO No 0918155 was made on 21 August 2009. It declares that those certain waterflow activated switches 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. 0918155 is taken to have come into force on 28 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 Commonwealth Parliament, provides a framework for the administration of customs duties and tariffs, including the establishment of a scheme for Tariff Concession Orders (TCOs). The 2010 Explanatory Statement for Tariff Concession Instrument No. 0918155 outlines the process for granting tariff concessions to certain goods, specifically addressing the problem of ensuring that such concessions do not apply to goods that could be produced domestically. This instrument was introduced to provide clarity and ensure that tariff concessions are granted in accordance with the core criteria stipulated in the Act. The instrument specifies that a TCO will be granted if no substitutable goods are produced in Australia, thus preventing the domestic industry from being unfairly disadvantaged. The policy objective is to facilitate the importation of goods at a reduced tariff rate when it is in the public interest and when such a concession does not adversely affect the production of similar goods within Australia.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for the creation and application of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks a concession on the customs duty for specific goods, provided that the goods are not among those explicitly excluded under section 269SJ of the Act. The process for applying for a TCO is contingent on the absence of substitutable goods being produced in Australia at the time of application, as stipulated by section 269C. The scope of the Act extends across the Commonwealth, with its provisions being applicable nationally. The Tariff Concession Instrument No. 0918155, which was issued on 21 August 2009, provides a concrete example of the application of these provisions, granting tariff concessions for certain waterflow activated switches. Notably, this TCO does not impose any disadvantages or liabilities on persons other than the Commonwealth, and it allows for the potential refund of duty on imported goods since the effective date of the TCO.
Key Provisions
The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs (the CEO) to grant Tariff Concession Orders (TCOs) under section 269F (1). These orders apply a lower rate of customs duty to specified goods, which must meet certain criteria. Section 269C of the Act requires that, for a TCO application to meet the core criteria, no substitutable goods can be produced in Australia in the ordinary course of business on the day the application is lodged. This definition is further explained in sections 269D and 269E of the Act, which provide the meanings of "goods produced in Australia" and "ordinary course of business", respectively.
The obligations imposed by the Act include a requirement for the CEO to decide whether an application meets the core criteria as outlined in section 269C. If satisfied, the CEO must issue a TCO as per section 269P(3). The process also involves publishing a notice in the Gazette as per subsection 269K(1) to invite any submissions regarding the application. In this case, no submissions were received.
Non-compliance with the requirements of the Customs Act 1901 may lead to various legal consequences. Offences under this Act could potentially include making a false or misleading statement in an application for a TCO, which is considered a criminal offence with a maximum penalty of 12 months imprisonment or a fine of 10,000 penalty units, or both, as per section 269SJ of the Act. Additionally, failure to comply with the terms of a TCO could result in civil or administrative penalties, although specific penalties are not outlined in the provided text.
In summary, the Customs Act 1901, through its Tariff Concession Orders, provides a mechanism for lowering customs duty rates on specified goods, provided that no substitutable goods are produced in Australia. The CEO has the responsibility to assess applications against the core criteria and issue TCOs where appropriate. The process also mandates public consultation through Gazette notices. Non-compliance with the Act's requirements can lead to criminal, civil, or administrative penalties.