EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918510
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.
Eurotech Agencies applied for a TCO in respect of certain pressure forming line on 01 June 2009.
Instrument
TCO No 0918510 was made on 18 September 2009. It declares that those certain pressure forming line 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. 0918510 is taken to have come into force on 01 June 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 regulate and control the importation and exportation of goods in Australia, including the imposition and collection of customs duty. The Act provides for the establishment of a tariff concession scheme through Tariff Concession Orders (TCOs), which can lower the rate of customs duty on specified goods. Enacted by the Australian Parliament, the Act aims to provide relief to businesses and consumers by reducing the cost of imported goods through tariff concessions. Tariff Concession Instrument No. 0918510, made under the Customs Act 1901, was introduced to address the need for tariff concessions on certain pressure forming lines, as requested by Eurotech Agencies. The instrument was developed following an application to the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for a TCO. The instrument, which came into effect on 1 June 2009, provides for these specific pressure forming lines to be subject to a free rate of duty, as opposed to the general rate of 5%.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of tariff concession orders (TCOs) which reduce the customs duty on specified goods. This mechanism is available to individuals or entities seeking lower duty rates for goods that are not produced in Australia in the ordinary course of business. The application process requires the applicant to satisfy the core criteria set out in the Act, specifically that no substitutable goods are produced domestically. Once an application is deemed to meet these criteria by the Chief Executive Officer of Customs, a TCO is issued, effectively reducing the customs duty on the specified goods. The geographic reach of this legislation is national, applying across Australia, and it is administered by the Commonwealth.
The scope of the Act does not extend to goods listed in section 269SJ, which are excluded from TCOs. The commencement of a TCO is retroactive to the date of the application, ensuring that any goods imported from that date are eligible for the reduced duty rate. The Act also ensures that no existing rights or liabilities of any person are adversely affected by the issuance of a TCO, thus protecting the interests of importers who may apply for duty refunds on goods imported since the TCO's effective date. The Act’s provisions may be further elaborated or modified through subordinate instruments, providing flexibility in the administration and application of tariff concessions.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (ss 269C, 269F, 269S). Section 269F allows any person to apply for a TCO in relation to specific goods. If the CEO determines that the application is not for goods listed in section 269SJ, which excludes certain goods from being subject to a TCO, the CEO must then assess whether the application meets the core criteria. This assessment is crucial as it determines the eligibility of the goods for tariff concessions. Section 269C stipulates that an application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. This provision ensures that the concessions are only applicable where there is no local production of similar goods.
The obligations imposed by the Act on the CEO include reviewing the application against the core criteria outlined in section 269C, ensuring that the goods do not fall under the restricted category specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria, section 269P(3) mandates that the CEO must issue a written order (TCO) specifying that the goods are subject to a particular item of Schedule 4 of the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections to the TCO (s 269K(1)). The TCO is deemed to come into force on the date the application was lodged (s 269S(1)). This systematic approach ensures transparency and provides an opportunity for stakeholders to voice their concerns.
Failure to comply with the requirements of the Customs Act 1901 regarding TCOs may result in various consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences, breaches of the Act can lead to legal actions. The severity of penalties can vary depending on the nature and extent of the breach, but they can include fines, imprisonment, or both under Australian law. The CEO's role in enforcing the Act is critical in maintaining the integrity of the tariff concession scheme. Importers who benefit from a TCO may also face repercussions if they do not adhere to the terms of the concession, potentially leading to the revocation of their concessions and the obligation to repay any duties improperly claimed.