EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0923896
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.
Trelleborg Marine Systems applied for a TCO in respect of certain marine wharf fender panels on 07 July 2009.
Instrument
TCO No 0923896 was made on 18 September 2009. It declares that those certain marine wharf fender panels 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. 0923896 is taken to have come into force on 07 July 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 a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) which are used to provide tariff relief on specific goods. This Act was introduced to address the need for a flexible mechanism to provide tariff concessions on certain goods where it is deemed appropriate, ensuring that Australian industries remain competitive while also protecting domestic producers from undue competition where necessary. The Tariff Concession Instrument No. 0923896, made under the authority of this Act, was introduced to provide tariff concessions for certain marine wharf fender panels, reflecting a policy objective to support specific sectors of the Australian economy by reducing the customs duty on these goods to zero, thereby facilitating their importation and use. This instrument was implemented without any adverse impact on the rights of persons other than the Commonwealth and provides a benefit to importers by allowing them to apply for a refund of duty paid on these goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to entities or individuals seeking to import goods that are not being produced in Australia and for which a tariff concession is sought. The TCO scheme applies to a variety of goods, provided they do not fall under the exclusions outlined in section 269SJ. Once an application is submitted and deemed to meet the core criteria outlined in section 269C, a TCO is issued, thereby applying a prescribed lower rate of customs duty as specified in the Customs Tariff Act 1995. The scope of this legislation is national, as it falls under the Commonwealth jurisdiction. Exclusions and specific conditions are detailed within the Act, and the application of the TCO is further refined through subordinate instruments, such as the Customs (Tariff Concession Orders) Rules 2010. The TCO does not affect existing rights or impose liabilities on individuals for actions taken prior to the order's registration.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0923896 (section 269C, 269B, and 269P) provide the criteria and process for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO). If the CEO is satisfied that the application for a TCO meets the core criteria, which include the absence of substitutable goods produced in Australia on the day the application was lodged, the CEO must issue a written TCO (section 269P(3)). This TCO applies a lower rate of duty, in this case free, to the specified goods (section 269S). The CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this instance, the CEO received no submissions against the TCO.
The obligations under this Act require applicants to ensure that their application for a TCO is valid and meets the core criteria set out in section 269C. The CEO, on receiving an application, must determine whether it is valid and meets the core criteria. If satisfied, the CEO must make a TCO (section 269P(3)) and publish a notice in the Gazette to allow for any objections (subsection 269K(1)). The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO came into force (subsection 269S(1)). Importers of the goods subject to the TCO can apply for a refund of duty paid on those goods since the TCO was taken to have come into force (paragraph 126(1)(r) of the Regulations).
There are no explicit offences, penalties, or civil/criminal consequences stated in the Act or Explanatory Statement for breaches related to the process of applying for or making a TCO. However, failure to comply with the conditions of the TCO once it is in force could result in the goods being subject to the original duty rate, and any refunds claimed may be subject to scrutiny by the CEO. The Customs Act 1901 and related regulations may contain provisions for offences and penalties related to breaches of customs laws generally, but these are not detailed in the provided text.