EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927438
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.
Esso Australia Resources applied for a TCO in respect of certain topside connection assembly on 30 July 2009.
Instrument
TCO No 0927438 was made on 23 October 2009. It declares that those certain topside connection assembly 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. 0927438 is taken to have come into force on 30 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 regulation of customs and excise duties. The Act was introduced to address the need for a structured approach to managing customs duties, ensuring that they are applied fairly and effectively. Within this framework, the Customs Act 1901 includes provisions for the establishment of Tariff Concession Orders (TCOs) which offer reduced customs duty rates on certain goods, provided specific criteria are met. The Tariff Concession Instrument No. 0927438, introduced on 23 October 2009, is an example of such an order. This particular TCO was created following an application by Esso Australia Resources for a concession on certain topside connection assemblies. The policy objective behind this legislation is to facilitate the import of goods that are not produced domestically, thereby supporting industries that rely on imported components and ensuring competitive market conditions.
Scope and Application
The Customs Act 1901, through Part XVA, governs the creation of Tariff Concession Orders (TCOs) which provide lower rates of customs duty for specified goods. These orders are applicable to goods that are not substitutable with any goods produced in Australia in the ordinary course of business, as per section 269C of the Act. The CEO of Customs is the authority responsible for making these orders, and they must be satisfied that the application meets the core criteria outlined in section 269C before proceeding. Notably, certain goods specified under section 269SJ of the Act are ineligible for a TCO. The geographic reach of this legislation is national, applying across all jurisdictions within Australia. The application process involves an invitation for submissions from the public, although no submissions were received for TCO No. 0927438. The commencement of a TCO is effective from the day the application is lodged, and it does not adversely affect the rights of any person, nor does it impose any liabilities on individuals other than the Commonwealth. This TCO specifically benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the concession.
Key Provisions
The main operative sections of this legislation (Tariff Concession Instrument No. 0927438) pertain to the making of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Specifically, Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria outlined in Section 269C, which stipulates that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must make a written order (TCO) declaring that the goods in question are subject to a prescribed rate of customs duty, as specified in the order. In this case, TCO No. 0927438, the CEO made a written order on 23 October 2009, declaring that certain topside connection assemblies are subject to a free rate of duty, as no substitutable goods were produced in Australia at the time the application was lodged.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person wishing to apply for a TCO must ensure their application is made in accordance with Section 269F of the Customs Act 1901. The CEO, upon receiving such an application, must then determine whether the application meets the core criteria as outlined in Section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, a process facilitated by definitions provided in Sections 269D, 269E and 269B of the Act. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO as per Section 269P(3). Additionally, under Section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties within a reasonable timeframe.
In terms of penalties and consequences for breach, the Customs Act 1901 does not explicitly outline specific offences or penalties related to the failure to comply with the provisions of TCO No. 0927438. However, general provisions of the Customs Act 1901 and associated regulations apply, which may include civil or criminal penalties for non-compliance with customs regulations. For instance, failure to declare goods correctly or making false statements could result in fines or other civil penalties. Additionally, serious breaches could lead to criminal charges, with potential penalties including imprisonment and fines. It is essential for all parties to adhere to the terms and conditions of the TCO and the broader customs legislation to avoid these potential consequences.