EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0930400
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.
Durisol Australia applied for a TCO in respect of certain profile shapes on 19 August 2009.
Instrument
TCO No 0930400 was made on 06 November 2009. It declares that those certain profile shapes 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. 0930400 is taken to have come into force on 19 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. 0930400 was enacted in 2010 under the Customs Act 1901, which provides a framework for the Chief Executive Officer (CEO) of Customs to grant Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. This legislative instrument was introduced to address a gap in the availability of concessional tariffs for certain imported goods where no substitutable Australian-made alternatives exist. The policy objective behind this is to support industries by making imported goods more competitive, thereby potentially boosting local industries that might otherwise be hindered by the availability of cheaper foreign products.
The instrument was developed in response to an application by Durisol Australia for a TCO on certain profile shapes, where the CEO found that no substitutable goods were produced in Australia. As a result, a TCO was issued, setting the duty rate for these profile shapes to free, effective from the date of application, 19 August 2009. This legislative action ensures that importers of these goods can benefit from the tariff concession, potentially receiving refunds for duties paid on imports since the effective date of the TCO, while not imposing any new liabilities on the parties involved.
Scope and Application
The Tariff Concession Instrument No. 0930400 under the Customs Act 1901 applies to individuals or entities seeking a tariff concession order for certain goods, specifically profile shapes, by applying to the Chief Executive Officer of Customs. The Act pertains to the process of granting tariff concessions for goods not produced in Australia in the ordinary course of business, thereby qualifying for a reduced or free rate of customs duty. This instrument is in effect from 19 August 2009, the date the application was lodged, and it does not disadvantage any person or impose liabilities for actions taken prior to its registration. The geographic reach of the Act is national, administered through the Commonwealth. There are specific exclusions, such as goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. The CEO is mandated to make the written order if satisfied that the application meets the core criteria outlined in the Act. Any interested parties may submit objections, though in this case, none were received, leading to the issuance of TCO No. 0930400 on 6 November 2009. The instrument does not affect the rights of any person other than the Commonwealth and allows for the potential refund of duty on imported goods under the relevant regulations.
Key Provisions
The primary operative sections of the Customs Act 1901, as outlined in the Explanatory Statement, detail the process and criteria for making Tariff Concession Orders (TCOs) (sections 269F, 269C, 269B, 269D, 269E, and 269P(3)). Section 269F allows for the application to the Chief Executive Officer (CEO) of Customs for a TCO. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must make a written order (TCO) declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. This results in a lower rate of customs duty for the goods in question.
The obligations imposed by the Act on the parties involved include the requirement for applicants to submit a valid application for a TCO that adheres to the criteria outlined in section 269C. The CEO has the obligation to assess the application, determine if it meets the core criteria, and if so, to make a written order as a TCO. Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the application as soon as practicable after accepting it as valid, as per section 269K(1). In the case of TCO No. 0930400, no submissions were received in response to this invitation.
In terms of offences, penalties, or consequences for breach, the Explanatory Statement does not explicitly outline specific criminal or civil penalties for non-compliance with the TCO process or the obligations imposed by the Act. However, the general legal framework under which the Customs Act operates would imply that breaches of the Act or its regulations could result in legal actions, including fines or other penalties as prescribed by the relevant laws. The specific maximum penalties would depend on the nature of the breach and the applicable legal provisions, but they are not detailed in this particular Explanatory Statement.