EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0921983
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.
Celtec Engineering Pty Ltd applied for a TCO in respect of certain twistlocks on 26 June 2009.
Instrument
TCO No 0921983 was made on 11 September 2009. It declares that those certain twistlocks 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. 0921983 is taken to have come into force on 26 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, facilitates the application of reduced customs duty rates for certain goods through Tariff Concession Orders (TCOs), which are authorised by the Chief Executive Officer of Customs (CEO). The Customs Act 1901 was introduced to streamline the process of applying for tariff concessions and to ensure that such concessions are granted under specific conditions, such as when no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0921983, made on 11 September 2009, provides an example of this process by granting a tariff concession for certain twistlocks, reducing their duty rate from 5% to free, as no substitutable goods were produced in Australia. The instrument came into force on the date of the application, 26 June 2009, and allows for the refund of duties paid on these goods since that date. This legislative framework aims to foster fair trade practices and support specific industries by reducing the financial burden of customs duties on eligible imported goods.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who can apply lower rates of customs duty on specified goods. This legislative instrument applies to individuals or entities seeking tariff concessions for specific goods, provided these goods are not listed in section 269SJ of the Act as ineligible. The core criteria for approving a TCO, as outlined in sections 269C and 269D of the Act, include the absence of substitutable goods produced in Australia on the date the application was lodged. The geographic reach of the Act is nationwide, encompassing all territories under Commonwealth jurisdiction. The application process requires public consultation, inviting submissions from any interested parties; however, in the case of TCO No. 0921983, no submissions were received. The commencement date for a TCO is the date on which the application is lodged, and the rights of persons other than the Commonwealth are protected from disadvantage or additional liabilities incurred before the registration of the TCO. The Tariff Concession Instrument No. 0921983, which took effect on 26 June 2009, grants a zero-rate duty for certain twistlocks, benefiting importers who can apply for duty refunds for goods imported since the effective date.
Key Provisions
The Customs Act 1901 (the Act) contains provisions that allow the Chief Executive Officer of Customs (the CEO) to issue Tariff Concession Orders (TCOs) under section 269F. These orders apply lower rates of customs duty to specified goods. To be eligible for a TCO, an applicant must meet the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia at the time the application is lodged. The term 'substitutable goods' is defined in section 269D and refers to goods produced in Australia that can be used in the same way as the goods subject to the TCO application.
The obligations placed on the CEO under the Act include the requirement to publish a notice in the Gazette, inviting any interested parties to submit reasons why a TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO must then decide whether to issue the TCO. In this case, the CEO was satisfied that no substitutable goods were produced in Australia and issued TCO No. 0921983 on 11 September 2009.
The Act outlines the consequences for breaches related to the issuance and application of TCOs. If a TCO is issued improperly, or if goods are imported under false pretences to benefit from the concessions, there could be significant legal ramifications. While specific penalties are not detailed in the explanatory statement, breaches of the Customs Act can generally lead to substantial fines and potential imprisonment under sections such as 265A for serious breaches. The precise penalties depend on the nature and severity of the breach.
In this particular case, TCO No. 0921983 declares that certain twistlocks are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, provided no substitutable goods are produced in Australia. This concession does not affect the rights of any person as at the date of registration and does not impose any new liabilities on any person. Importers, however, may benefit by applying for a refund of duty on goods imported since the TCO was taken to have come into force on 26 June 2009.