EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927439
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 junction boxes on 30 July 2009.
Instrument
TCO No 0927439 was made on 23 October 2009. It declares that those certain topside junction boxes 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 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. 0927439 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 imposition of customs duties on imported goods. One of its key provisions, introduced to address gaps in tariff concession mechanisms, is the scheme allowing for Tariff Concession Orders (TCOs). This scheme enables the Chief Executive Officer of Customs to apply lower rates of customs duty on specified goods through the issuance of TCOs. The primary objective of this legislative mechanism is to facilitate the import of goods that are not produced domestically, thereby encouraging trade and reducing costs for businesses. This approach aims to provide economic benefits by allowing businesses to access competitively priced goods from international markets, provided they do not have local alternatives. The Customs Act 1901 thus seeks to balance the need for tariff revenue with the economic benefits of facilitating international trade through targeted tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 0927439 applies to specific topside junction boxes as declared under the Customs Act 1901, where the CEO of Customs determines that no substitutable goods were produced in Australia on the date the application was lodged. The instrument extends to the person or entity that applied for the concession, specifically Esso Australia Resources in this case, and any subsequent importers of the specified goods. The geographic reach of this Act is national, as it pertains to goods entering Australia and is subject to the customs regulations as outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The application of the concession is contingent on the absence of substitutable goods in Australia, as outlined in sections 269C and 269SJ of the Act, and does not extend to goods that are already being produced domestically or that have alternative uses available within Australia. The instrument does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person's rights as they stood before the concession was registered. The instrument came into effect on 30 July 2009, the date on which the application was lodged, and allows for the potential refund of duties for importers under the relevant regulations.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0927439 are found in sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C establishes the core criteria that must be met for a Tariff Concession Order (TCO) to be made, focusing on the absence of substitutable goods produced in Australia. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the core criteria are met, they must make a written order declaring that the goods in question are subject to a specified rate of duty under the Customs Tariff Act 1995. Finally, section 269S(1) clarifies that a TCO comes into force on the date the application is lodged, making it effective from 30 July 2009 in this instance.
The obligations imposed by the Act on parties or entities it governs are primarily administrative and procedural. The CEO of Customs must ensure that any TCO application is assessed against the core criteria outlined in section 269C, particularly verifying that no substitutable goods are being produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties once an application is accepted as valid, as per section 269K(1). If no submissions are received, the CEO proceeds to make the TCO. Importers who have already paid duty on the goods covered by the TCO can apply for a refund under paragraph 126(1)(r) of the Regulations.
The legislation also outlines the consequences of breaching its provisions. While the Explanatory Statement does not explicitly detail offences, penalties, or civil/criminal consequences for breaches related to TCOs, the Customs Act 1901 generally provides for penalties under sections such as 259 for offences related to false statements or fraudulent conduct. The maximum penalties for such offences can include fines up to $22,200 or imprisonment for up to two years, or both, under section 259 of the Act. These provisions ensure compliance and deter non-compliance with the requirements set out in the Act.