EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918908
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.
Bluescope Steel Pty Ltd applied for a TCO in respect of certain fire detection system on 04 June 2009.
Instrument
TCO No 0918908 was made on 28 August 2009. It declares that those certain fire detection system 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. 0918908 is taken to have come into force on 04 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 Tariff Concession Instrument No. 0918908 was enacted in 2009 under the Customs Act 1901, aimed at addressing the need for tariff concessions for specific imported goods. This instrument was introduced to provide a lower rate of customs duty for certain goods, as long as they meet the specified criteria, thereby encouraging importation and reducing costs for businesses that rely on these imports. The instrument was enacted by the Chief Executive Officer of Customs, who is authorised to make such decisions under section 269F of the Customs Act 1901. The primary policy objective behind this legislation is to facilitate the importation of goods that are not produced domestically, ensuring that Australian businesses have access to a broader range of products while also protecting local industries from undue competition.
Scope and Application
The Tariff Concession Instrument No. 0918908 applies to the process of granting tariff concessions on specific goods under the Customs Act 1901. The Act applies to any person or entity that seeks to import goods that are subject to a Tariff Concession Order (TCO). These orders are made by the Chief Executive Officer of Customs and reduce the rate of customs duty on specified goods if certain criteria are met. The scope of the Act includes the determination and implementation of TCOs for goods not specified in section 269SJ, which excludes certain goods from TCO eligibility. The Act operates on a national level within Australia and affects the importation of goods subject to the concessions. The Act also includes provisions for the publication of TCO applications and invites submissions from interested parties, although in this case, no submissions were received. The TCO itself does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth, but it does provide benefits to importers by potentially allowing them to apply for refunds of duties paid on goods imported since the TCO's effective date. The application and effect of the TCO can be extended or restricted through subordinate instruments under the Customs Act 1901.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269S of the Customs Act 1901, which govern the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269C sets out the core criteria that an application for a TCO must meet, namely, that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P outlines the process for the CEO to make a written order (the TCO) if the application meets the core criteria. Section 269S specifies the commencement date for the TCO, which is the same as the date on which the application was lodged.
The Customs Act 1901 imposes several obligations and requirements on the parties involved in the TCO process. For example, section 269F allows a person to apply to the CEO for a TCO in respect of goods. The CEO must then decide whether the application meets the core criteria specified in section 269C. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Additionally, subsection 269K(1) of the Act requires the CEO to publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made. This ensures transparency and allows for public consultation on the proposed concession.
Failure to comply with the provisions of the Customs Act 1901 can lead to various offences, penalties, or civil/criminal consequences. However, the Explanatory Statement does not specify any particular offences, penalties, or consequences related to the making of TCOs. Generally, breaches of customs regulations can result in civil penalties, including fines and the seizure of goods. In more serious cases, criminal charges may be pursued, leading to potential imprisonment. The specific penalties depend on the nature and severity of the breach, as outlined in the Customs Act 1901 and related regulations.
The Tariff Concession Order No. 0918908, made on 28 August 2009, is an example of how the Act operates in practice. Bluescope Steel Pty Ltd applied for a TCO in respect of certain fire detection systems on 04 June 2009. The CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria. The TCO declares that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with the general rate of duty on these goods being 5% and the rate for goods subject to the TCO being free. This means that importers of these goods can benefit from the tariff concession and may also apply for a refund of duty on goods imported since the TCO came into force on 04 June 2009.