EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0928110
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.
Tasman Oil Tools applied for a TCO in respect of certain magnetic junk catchers on 04 August 2009.
Instrument
TCO No 0928110 was made on 23 October 2009. It declares that those certain magnetic junk catchers 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. 0928110 is taken to have come into force on 04 August 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, establishes a framework for the regulation of customs duties and tariffs, including provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument addresses the need for a mechanism to provide tariff relief for certain imported goods that are not produced domestically, ensuring that Australian consumers and businesses can access competitively priced goods. The Tariff Concession Instrument No. 0928110 was introduced to provide tariff relief on specific magnetic junk catchers, as no substitutable goods were being produced in Australia at the time of the application. The policy objective is to facilitate access to affordable goods that are essential for Australian industries, thereby supporting economic efficiency and consumer welfare without disadvantaging existing rights or imposing new liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0928110 under the Customs Act 1901 applies to goods specified in the instrument, namely certain magnetic junk catchers, which are subject to a tariff concession order (TCO) reducing their customs duty from the general rate of 5% to free. The application of the Act is initiated by a person or entity seeking the concession, and the decision to grant the concession is made by the Chief Executive Officer of Customs (CEO) if the application meets the core criteria. The concession applies nationally, as per the jurisdictional reach of the Customs Act 1901. There are specific exclusions as outlined in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The instrument extends the application of the Customs Act 1901 by specifying particular goods eligible for duty concessions through subordinate instruments like TCOs. The TCO does not retroactively affect the rights of any person, including the Commonwealth, and therefore does not impose any liabilities on any person for actions taken before its registration.
Key Provisions
The Customs Act 1901, through Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (CEO) to provide reduced customs duties on certain goods. Under section 269F, a person can apply for a TCO in respect of specific goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, which excludes certain goods from TCO eligibility, the CEO then assesses whether the application meets the core criteria outlined in section 269C. A TCO application meets these criteria if, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business. The definitions of "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 the core criteria, they are required under subsection 269P(3) to issue a written TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations under the Customs Act 1901 for parties applying for a TCO include ensuring that the application is made in accordance with section 269F and that it pertains to goods that are not excluded under section 269SJ. The CEO, upon receiving a valid application, must publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit any objections to the making of the TCO. Additionally, the CEO is required to evaluate the application against the core criteria set out in section 269C and to make a decision on whether to issue a TCO. The process ensures transparency and allows for any stakeholder input before a TCO is made. The TCO in question, number 0928110, was issued on 23 October 2009, and it specifies that certain magnetic junk catchers are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free, as the CEO was satisfied that no substitutable goods were produced in Australia.
The Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches of the TCO provisions. However, the general legal framework of the Act and associated regulations provide a basis for enforcement. Failure to comply with the provisions of the Customs Act 1901, including the TCO process, could potentially result in civil or criminal penalties. For instance, under section 131 of the Customs Act 1901, penalties may be imposed for incorrect declarations, underpayments of duty, or other breaches of customs regulations. The maximum penalties can vary significantly depending on the nature and severity of the offence, with potential fines and imprisonment for serious or repeated breaches. Given that the TCO process is intended to benefit importers by providing duty relief on certain goods, ensuring compliance with the Act's provisions is crucial to avoid any adverse legal consequences.