EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925987
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.
Jan De Nul Nv applied for a TCO in respect of certain rubber floating hose on 21 July 2009.
Instrument
TCO No 0925987 was made on 02 October 2009. It declares that those certain rubber floating hose 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. 0925987 is taken to have come into force on 21 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 was enacted to provide a comprehensive framework for the administration of customs and excise duties in Australia. In addressing the need for a streamlined process to grant tariff concessions on imported goods, the Act introduced the scheme for Tariff Concession Orders (TCOs), which was established under Part XVA. This instrument aims to provide relief from customs duty on specific goods by allowing the Chief Executive Officer of Customs to make orders based on applications from interested parties. The primary objective is to ensure that such concessions are only granted when no substitutable goods are produced in Australia, thereby encouraging the importation of goods that are not locally manufactured.
The Tariff Concession Instrument No. 0925987, issued in 2009, exemplifies the application of this scheme. Jan De Nul Nv successfully applied for a TCO for certain rubber floating hose, resulting in the concession of duty for these goods. This order demonstrates the Act's intent to facilitate the importation of non-substitutable goods by removing duty barriers, which in turn supports economic efficiency and potentially lowers costs for businesses importing these specific items. The instrument does not disadvantage existing parties or impose new liabilities, maintaining the balance between encouraging imports and protecting local industries.
Scope and Application
The Tariff Concession Instrument No. 0925987 is a legislative instrument under the Customs Act 1901 that applies to the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. It specifically pertains to goods that are the subject of a TCO application, such as the rubber floating hose for which Jan De Nul Nv applied. This instrument is designed to provide tariff concessions on certain goods, in this case reducing the duty from 5% to free, provided that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. The scope of this legislation is national, given its basis in the Customs Act 1901, which is a Commonwealth Act, and its application extends across all states and territories of Australia. The instrument excludes any goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. Additionally, the instrument does not disadvantage any person or impose liabilities on anyone for actions taken prior to its registration, and it does not affect the rights of the Commonwealth. The commencement of this specific TCO aligns with the date the application was lodged, in this case, 21 July 2009.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0925987 under the Customs Act 1901 (section 269F) permit the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) in respect of specified goods. A TCO application can be made by any person who believes that the goods they are importing should qualify for a lower rate of customs duty (section 269C). The CEO must assess whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia at the time of application (section 269P(3)). If the CEO determines that the application meets these criteria, they are required to issue a TCO, declaring that the specified goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). For instance, Instrument TCO No. 0925987 pertains to certain rubber floating hose, which are now subject to a 0% duty rate instead of the general 5% rate (section 269P(3)).
The Act imposes several obligations on the parties involved. An applicant must ensure their application for a TCO is valid and meets the core criteria, which includes demonstrating that no substitutable goods are produced in Australia (section 269C). The CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested party to submit any objections or reasons why the TCO should not be made (subsection 269K(1)). The CEO must then review these submissions before making a final decision on the TCO (subsection 269K(1)). In the case of TCO No. 0925987, no submissions were received, and the CEO proceeded to issue the TCO as the application met the core criteria (subsection 269K(1)).
The Act outlines specific consequences for non-compliance with its provisions. If a person knowingly provides false or misleading information in an application for a TCO, they may face civil penalties under section 283AB of the Customs Act 1901. The maximum penalty for such an offence is 10,000 penalty units or imprisonment for five years, or both. Additionally, under section 283BA, a person who knowingly uses goods in a way that contravenes a TCO may also face penalties. The maximum penalty for this offence is 10,000 penalty units, reflecting the seriousness of the breach. The Act ensures that the integrity of the tariff concession scheme is maintained and that any misuse is appropriately addressed.