EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919365
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.
Alternative Glass Supplies applied for a TCO in respect of certain gas powered kiln on 09 June 2009.
Instrument
TCO No 0919365 was made on 04 September 2009. It declares that those certain gas powered kiln 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. 0919365 is taken to have come into force on 09 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, enacted by the Australian Parliament, provides for the imposition of tariffs on imported goods, with certain exceptions. This legislation was introduced to streamline the process of applying for tariff concessions and ensure that the Australian market is not disadvantaged by imposing tariffs on goods that can be effectively produced domestically. Under Part XVA of the Act, the Chief Executive Officer of Customs is authorised to issue Tariff Concession Orders (TCOs) which reduce or eliminate customs duty on specified goods if certain conditions are met. Specifically, a TCO may be issued if no substitutable goods are produced in Australia at the time of the application. In response to an application from Alternative Glass Supplies, TCO No. 0919365 was issued on 4 September 2009, reducing the duty on certain gas-powered kilns from 5% to free. This order was made after it was determined that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act. The TCO was published in the Gazette, and no objections were received, ensuring that the policy objective of facilitating legitimate trade without unduly burdening domestic industries was achieved.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs to reduce customs duty rates on specific goods. This instrument is available to any person who meets the core criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of the Act is national, applying across Australia, and the application process includes public consultation as mandated by the Act. The commencement of a TCO is deemed to be effective from the date the application is lodged. In the case of TCO No. 0919365, which was made for certain gas-powered kilns, the order came into force on the date the application was submitted, 09 June 2009, and effectively reduced the duty rate from 5% to free. The TCO does not affect existing rights or impose liabilities on any person, except to the benefit of importers who can apply for a refund of duty on goods imported since the effective date of the TCO. The scope of the TCO can be further extended or specified through subordinate instruments as required.
Key Provisions
The Tariff Concession Instrument No. 0919365 under the Customs Act 1901 (the Act) provides a mechanism for granting tariff concessions on specific goods, thereby reducing the customs duty payable on those goods. According to section 269F, a person may apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) concerning particular goods. If the CEO is satisfied that the application does not involve goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO, the CEO must then assess whether the application meets the core criteria set out in section 269C.
The Act outlines that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This means that the goods in question must not have a local equivalent that serves the same purpose or design use. The definitions of "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. Once the CEO is satisfied that the application meets these criteria, subsection 269P(3) requires the CEO to issue a written TCO declaring that the specified goods are subject to a particular item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily focused on the application process and the CEO's assessment of the application. The applicant must ensure that their application is valid and meets the core criteria, while the CEO is obligated to review the application, consider any submissions received, and decide whether to grant the TCO. According to subsection 269K(1), the CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to lodge submissions if they believe the TCO should not proceed. Failure to comply with these obligations may result in the TCO not being granted, potentially leaving the applicant without the intended tariff concession.
In terms of legal consequences, the Act does not explicitly outline specific offences, penalties, or consequences for breaches related to the TCO process itself. However, general legal principles and other applicable laws may apply if any party fails to comply with their obligations under the Act. For example, if the CEO fails to properly assess an application or does not follow the required procedures, this could potentially be subject to judicial review. Additionally, if the TCO is found to have been granted improperly, the decision could be overturned, and any benefits received under the TCO could be subject to recovery by the Commonwealth. The focus of the Act appears to be more on ensuring a fair and transparent process for granting tariff concessions rather than on punitive measures for breaches.