EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0926917
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.
Air Design Pty Ltd applied for a TCO in respect of certain galvanised steel sheet composite on 27 July 2009.
Instrument
TCO No 0926917 was made on 09 October 2009. It declares that those certain galvanised steel sheet composite 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. 0926917 is taken to have come into force on 27 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 Parliament of Australia, establishes a framework for the regulation of customs and excise duties, among other things. It includes provisions for the application of tariff concession orders (TCOs) to reduce the duty payable on certain imported goods under specific circumstances. The objective of this legislation is to provide a mechanism for the Chief Executive Officer of Customs to grant tariff concessions, thereby supporting economic efficiency and competitiveness by reducing the cost of imported goods. The Explanatory Statement for Tariff Concession Instrument No. 0926917, made under the Customs Act 1901, illustrates the application of this scheme. In this instance, Air Design Pty Ltd applied for a tariff concession on certain galvanised steel sheet composites, and the CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria. Consequently, the CEO issued a TCO, effective from the date of the application, 27 July 2009, which provided a free rate of duty on the specified goods, as opposed to the general rate of 5%.
Scope and Application
The Customs Act 1901 applies to any person, entity, or industry involved in the import or export of goods, including the conduct and transactions relating to these activities. Specifically, the Act governs the process by which Tariff Concession Orders (TCOs) can be applied for and granted by the Chief Executive Officer of Customs, facilitating tariff concessions for certain goods. The geographic and jurisdictional reach of the Act is national, covering all areas within Australia as it is a Commonwealth Act. The Act excludes certain goods from being subject to a TCO as specified in section 269SJ, such as those that may harm national security or public health. The application of the Act can be further defined or restricted through subordinate instruments, which may include regulations that provide additional details on the application process or criteria for tariff concessions.
The Tariff Concession Instrument No. 0926917, issued under the Customs Act, exemplifies the Act's application by providing a tariff concession for certain galvanised steel sheet composites. The instrument came into effect from the date the application was lodged, 27 July 2009, and sets the duty rate for these goods to zero, previously set at 5%. The instrument ensures that no existing rights or liabilities of any person, other than the Commonwealth, are adversely affected by the concession. This measure particularly benefits importers who can apply for duty refunds for imports made since the effective date of the concession.
Key Provisions
The Tariff Concession Instrument No. 0926917, under the Customs Act 1901, provides specific concessions on customs duty for certain goods. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) for goods. If the application meets the core criteria set out in sections 269C and 269SJ, and there are no substitutable goods produced in Australia (as per section 269D and 269E), the CEO is required to issue a TCO (section 269P). This TCO then specifies that the goods in question are subject to a reduced or free rate of customs duty as per the Customs Tariff Act 1995.
Entities or individuals applying for a TCO must ensure that their application is valid and meets the criteria outlined in the Customs Act 1901. They must also be aware of the process, which includes the CEO publishing a notice in the Gazette to invite submissions from any interested parties (subsection 269K(1)). Any submissions received must be addressed before the TCO is made. The TCO, once issued, will apply from the date the application was lodged (subsection 269S(1)). Importers of the affected goods will have the right to apply for a refund of any duty paid since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Non-compliance with the provisions of the Customs Act 1901, including making false or misleading statements in an application for a TCO, could result in significant penalties. Offences under this Act can lead to both civil and criminal consequences. Civil penalties can include fines, while criminal penalties may involve imprisonment, depending on the severity of the breach. The specific maximum penalties are not detailed in the explanatory statement, but they would be consistent with the broader provisions of the Customs Act 1901 and related legislation. It is important for all parties involved to understand and comply with these obligations to avoid potential legal repercussions.