EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927403
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.
Godfrey Hirst applied for a TCO in respect of certain carpet coater on 29 July 2009.
Instrument
TCO No 0927403 was made on 09 October 2009. It declares that those certain carpet coater 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. 0927403 is taken to have come into force on 29 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, addresses the need for a streamlined process to grant tariff concessions on certain imported goods. This Act facilitates the application for Tariff Concession Orders (TCOs) by individuals seeking reduced customs duty rates for goods that meet specific criteria, particularly where no suitable Australian-made alternatives exist. The instrument in question, Tariff Concession Instrument No. 0927403, was introduced to provide a tariff concession for certain carpet coaters, aligning with the policy objective of promoting fair trade practices and supporting industries where local production does not sufficiently meet demand. The process involves a thorough review by the Chief Executive Officer of Customs, who must ensure the application complies with the core criteria outlined in the Act, thereby ensuring the tariff concessions are granted appropriately and without adverse impacts on existing rights or liabilities.
Scope and Application
The Tariff Concession Order No. 0927403 under the Customs Act 1901 applies to specific goods, namely certain carpet coaters, and is designed to provide a lower rate of customs duty for these goods. The application for such a tariff concession is made by an entity or individual to the Chief Executive Officer of Customs (CEO) and must meet the core criteria set out in the Act. If the CEO determines that the application meets these criteria, a Tariff Concession Order (TCO) is issued, specifying a reduced duty rate for the named goods. This legislation is applicable across the Commonwealth of Australia and is implemented through subordinate instruments, specifically under the Customs Tariff Act 1995, which sets out the applicable duty rates in the Tariff. The TCO does not affect any existing rights or impose liabilities on any person other than the Commonwealth, thereby ensuring that only the rights of importers are beneficially affected. Furthermore, the TCO exempts the named goods from the general rate of duty, which is 5%, and instead applies a duty rate of free. The TCO was registered on 9 October 2009, but is taken to have come into force on 29 July 2009, the date on which the application was lodged. The order does not disadvantage any person or impose liabilities for actions taken prior to its registration.
Key Provisions
The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs), which can lower the rate of customs duty on certain goods. When an application is made under section 269F, the Chief Executive Officer of Customs (CEO) must determine if it meets the core criteria outlined in section 269C. For an application to meet these criteria, it must be established that, on the date the application was submitted, there were no substitutable goods produced in Australia in the ordinary course of business. Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, they must issue a TCO as per section 269P(3). The TCO in question, TCO No. 0927403, pertains to specific carpet coaters, and it was issued on 9 October 2009, applying item 50 of Schedule 4 to the Customs Tariff Act 1995, which reduces the duty rate from 5% to free.
Entities subject to the Customs Act 1901, including applicants for TCOs and importers of goods, must adhere to the statutory requirements set out in the Act. For applicants, this involves demonstrating that no substitutable goods are produced in Australia and meeting the core criteria for a TCO. Importers, on the other hand, must be aware of their rights under the Act, particularly the ability to apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations. The CEO is also obligated to publish a notice in the Gazette inviting any submissions from the public regarding the proposed TCO, although in this case, no submissions were received. Additionally, the TCO does not impose any liabilities on persons other than the Commonwealth for actions taken prior to the TCO's registration.
Breaches of the requirements under the Customs Act 1901 may result in various civil or criminal consequences. While the explanatory statement does not specify particular offences or penalties for non-compliance with TCOs, general penalties under the Customs Act can include fines and imprisonment. For example, section 225 of the Customs Act provides for a maximum penalty of 12 months imprisonment or a fine of 120 penalty units, or both, for fraudulent activities related to customs duty. However, the specific penalties for breaches related to TCOs would need to be determined by reference to the relevant sections of the Act and any applicable regulations.