EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919756
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.
Caps Australia Pty Ltd applied for a TCO in respect of certain air dryer on 11 June 2009.
Instrument
TCO No 0919756 was made on 04 September 2009. It declares that those certain air dryer 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. 0919756 is taken to have come into force on 11 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 Commonwealth Parliament, provides a framework for managing customs duties, including the application of tariff concession orders (TCOs) to lower the duty on certain goods. The Act was amended to include the scheme for TCOs, addressing the need for a streamlined process to reduce customs duties on specific goods where no substitutable Australian-produced goods exist. This mechanism ensures that Australian consumers and businesses can access certain goods at a reduced cost while also encouraging the production of goods within Australia. Tariff Concession Instrument No. 0919756, made under this Act, provides a tariff concession for certain air dryers, reducing the duty rate from 5% to free, effective from 11 June 2009, the date the application was lodged. This concession was made after it was determined that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Customs Act 1901. The instrument was published in the Gazette with an invitation for submissions, though none were received, and it came into force on the date of application lodging.
Scope and Application
The Customs Act 1901, specifically through Tariff Concession Orders (TCOs) under Part XVA, facilitates the application of reduced customs duties on certain imported goods, provided these goods are not substitutable by locally produced alternatives. This mechanism is applicable to any individual or entity seeking to import goods for which a TCO can be sought, contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced domestically in the ordinary course of business. The geographic scope of this Act is national, as it applies across all jurisdictions within Australia. Notably, the Act excludes goods specified in section 269SJ, which are ineligible for TCOs. The application process involves an application to the CEO, followed by a decision-making process based on the criteria set out in sections 269C, 269D, and 269E of the Act. Once a TCO is granted, it applies retroactively from the date the application was lodged, without imposing any liabilities on persons other than the Commonwealth. This legislative framework ensures that the rights of importers are protected and can benefit from duty refunds for eligible imported goods.
Key Provisions
The Tariff Concession Instrument No. 0919756, which was made under section 269F of the Customs Act 1901, provides for a lower rate of customs duty on certain air dryers. The CEO of Customs, having considered the application from Caps Australia Pty Ltd, issued this order on 4 September 2009. This instrument applies to the specific air dryers described in the application, and it specifies that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, which sets the duty at zero percent.
Under this legislation, the CEO has the authority to make a Tariff Concession Order (TCO) if certain conditions are met, as outlined in sections 269C and 269P of the Customs Act. Specifically, the CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must also consider whether the application meets the core criteria and, if satisfied, make a written order specifying the goods to which the concession applies. The TCO is effective from the date the application was lodged, as specified in subsection 269S(1) of the Act.
The obligations under this Act for parties such as Caps Australia Pty Ltd include submitting a valid application to the CEO and ensuring that the application meets the criteria for a TCO. The CEO, in turn, is required to review the application, make a determination, and if satisfied, issue the TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as mandated by subsection 269K(1) of the Act. In this case, the CEO did not receive any submissions, and the TCO was issued accordingly.
Breaching the conditions or requirements set out in this legislation could lead to civil or criminal consequences. Although the specific penalties are not detailed in the explanatory statement, breaches of customs legislation generally can result in fines and other penalties under the relevant acts. For instance, under section 279 of the Customs Act, persons who make false statements or representations in connection with customs matters can be subject to penalties. The maximum penalties for such offences can include fines up to 10,000 penalty units or imprisonment for up to five years, or both, depending on the severity and intent of the breach.