EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931306
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.
Csbp Ltd applied for a TCO in respect of certain liquid and or gas transfer marine loader arms on 26 August 2009.
Instrument
TCO No 0931306 was made on 13 November 2009. It declares that those certain liquid and or gas transfer marine loader arms 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. 0931306 is taken to have come into force on 26 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 Parliament of Australia, establishes a framework for managing and regulating the importation of goods into the country. One significant aspect of this Act is the provision for Tariff Concession Orders (TCOs) under Part XVA, which were introduced to address the issue of ensuring fair trade practices by providing tariff relief on specific goods that are not produced domestically. This mechanism ensures that Australian industries do not face undue competition from locally manufactured goods, while also encouraging the import of goods that are not produced in Australia, thus benefiting consumers and importers by potentially lowering the cost of such goods. The policy objective is to balance the protection of domestic industries with the facilitation of trade, ensuring that the Australian market remains competitive and that consumers have access to a diverse range of products.
Scope and Application
The Tariff Concession Instrument No. 0931306, which is an instrument under the Customs Act 1901, applies specifically to the goods known as certain liquid and/or gas transfer marine loader arms, and the entity that applied for the concession, Csbp Ltd. This instrument was enacted to provide a tariff concession for these specified goods, allowing for a reduction in the customs duty rate from the general rate of 5% to free. The application for this concession was accepted by the Chief Executive Officer of Customs (CEO) on the basis that no substitutable goods were produced in Australia at the time the application was lodged, meeting the core criteria as set out in section 269C of the Act. The instrument was published in the Gazette, inviting any interested party to submit objections, although none were received. The effect of this TCO is to provide a benefit to importers by potentially allowing them to claim a refund of duty paid on these goods imported since the date the TCO is deemed to have come into force, which is the date the application was lodged, August 26, 2009. Notably, this instrument does not impose any liabilities on any person other than the Commonwealth nor does it affect any pre-existing rights of individuals other than the Commonwealth.
Key Provisions
The Tariff Concession Order No. 0931306, made under section 269P of the Customs Act 1901, applies to certain liquid and/or gas transfer marine loader arms (section 269P(3)). This instrument was issued following an application by Csbp Ltd on 26 August 2009 and came into force on the same date (subsection 269S(1)). The Chief Executive Officer of Customs (CEO) determined that the application met the core criteria, as no substitutable goods were produced in Australia on the application date (section 269C). Consequently, a TCO was issued, declaring these goods to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5% (subsection 269P(3)).
Under this legislation, several obligations are imposed on both the CEO and the applicants for a TCO. For instance, an applicant must submit a valid application to the CEO (section 269F). The CEO is required to decide whether the application meets the core criteria, specifically assessing whether no substitutable goods were produced in Australia on the date of application (section 269C). If the CEO is satisfied that the application meets these criteria, they must issue a written order (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1)). However, in this case, no submissions were received.
The Act does not explicitly outline offences or penalties for breaches of the TCO provisions. However, any failure to comply with the requirements of the Customs Act 1901 or the Customs Tariff Act 1995 could potentially lead to civil or criminal consequences under the general provisions of those Acts. For instance, under section 206 of the Customs Act 1901, the maximum penalty for knowingly importing goods in contravention of the Customs Act includes imprisonment for up to 10 years or a fine of up to 120,000 penalty units, or both. Similarly, section 188A of the Crimes Act 1914 imposes penalties for offences against an Act of Parliament, including fines and imprisonment terms that depend on the nature and severity of the offence. The specific penalties would be determined by the court based on the circumstances of any alleged breach.