EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929386
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.
Jan De Nul NV applied for a TCO in respect of certain dredging cutter parts on 11 August 2009.
Instrument
TCO No 0929386 was made on 30 October 2009. It declares that those certain dredging cutter parts 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. 0929386 is taken to have come into force on 11 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 Tariff Concession Instrument No. 0929386, enacted in 2009, is a legislative tool under the Customs Act 1901 designed to facilitate tariff concessions for specific goods. This instrument was introduced to address the gap in the tariff scheme by allowing the Chief Executive Officer of Customs to grant tariff concessions to importers of goods that are not produced in Australia, thus ensuring they do not face higher customs duties. The instrument was created by the relevant legislature, which authorised the CEO to make such orders under section 269F of the Act. The policy objective behind this legislation is to provide relief to importers by reducing the customs duty on certain goods, thereby promoting fair trade practices and supporting industries that do not have local production capabilities.
The process involves an application by an interested party to the CEO, followed by a review to ensure the goods meet the specified criteria. Once approved, the CEO issues a written order, known as a Tariff Concession Order (TCO), which specifies the goods eligible for the concession. This mechanism aims to benefit importers by lowering their costs, which in turn can lead to more competitive pricing and increased consumer access to certain products. The 2009 Instrument specifically addressed an application from Jan De Nul NV regarding dredging cutter parts, granting them a tariff concession and setting the duty rate at zero for these goods.
Scope and Application
The Tariff Concession Instrument No. 0929386 under the Customs Act 1901 applies to individuals or entities seeking a tariff concession order (TCO) for specific goods that qualify under the Act's criteria. This particular TCO, made on 30 October 2009, pertains to certain dredging cutter parts applied for by Jan De Nul NV on 11 August 2009. The instrument declares that these dredging cutter parts are subject to a concession where the general rate of duty of 5% is reduced to free, provided the goods meet the specified criteria for substitutability and production in Australia. The application process requires the Chief Executive Officer of Customs to ensure that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of this Act is national, applying across all states and territories in Australia. Importantly, the TCO does not affect the rights of any person as at the date of registration and does not impose any new liabilities, although it does benefit importers by potentially entitling them to a refund of duty for imports made since the TCO came into force on 11 August 2009. The Act allows for the extension or restriction of application through subordinate instruments, ensuring flexibility in its implementation and enforcement.
Key Provisions
The primary operative sections of the legislation, namely sections 269C, 269B, 269D, 269E, and 269F, establish the framework for the application and approval of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F outlines the process by which an individual or entity can apply for a TCO in relation to specific goods. The application must be made to the Chief Executive Officer of Customs (CEO) and must not concern goods specified in section 269SJ, which are ineligible for TCOs. If the CEO determines that the application meets the core criteria specified in section 269C, a TCO will be issued. This process hinges on the absence of substitutable goods being produced in Australia in the ordinary course of business, as defined by sections 269B, 269D, and 269E.
The obligations imposed by this legislation primarily rest on the applicant and the CEO. The applicant must ensure that their application is valid and pertains to goods that meet the eligibility criteria outlined in the Act. The CEO, on the other hand, must review the application to verify that it complies with the core criteria and that the goods in question are not substitutable by any Australian-produced goods. Once satisfied, the CEO is mandated to issue a written TCO. Furthermore, as stipulated in subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted.
The Act does not explicitly detail specific offences or penalties for breaches related to the TCO process. However, any non-compliance with the Customs Act 1901 or the Customs Tariff Act 1995 could potentially lead to legal consequences. For example, providing false information in a TCO application might be considered fraudulent activity under other sections of the Customs Act, which could result in criminal charges. The penalties for such offences could include fines and imprisonment, although the exact penalties would depend on the nature and severity of the offence under broader customs legislation. Additionally, failure to adhere to the terms of the TCO once it is issued could lead to civil penalties, including financial penalties for incorrect duty payments.