EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931863
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.
Boyne Smelters Limited applied for a TCO in respect of certain electro-hydraulic power units on 28 August 2009.
Instrument
TCO No 0931863 was made on 20 November 2009. It declares that those certain power units electro hydraulic 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. 0931863 is taken to have come into force on 28 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. 0931863 was enacted in 2009 under the Customs Act 1901 to address a gap in tariff concessions for specific goods, in this case, certain electro-hydraulic power units. The instrument was made by the Chief Executive Officer of Customs, as per the authority granted under section 269F of the Act. The policy objective is to provide relief to importers of these specific goods by reducing the customs duty from the general rate of 5% to zero, provided no substitutable goods are produced in Australia. This concession was introduced to encourage the importation of these goods, potentially supporting industrial needs or economic activities that rely on such equipment. The instrument became effective from the date the application was lodged, which was 28 August 2009, and did not disadvantage any existing rights of parties or impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0931863 under the Customs Act 1901 applies to electro-hydraulic power units and is designed to provide tariff concessions to specific goods that are imported into Australia. This instrument is applicable to the entity that made the application, in this case, Boyne Smelters Limited, and to any other entities importing similar goods that meet the criteria set out in the Act. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia. It is pertinent to note that the instrument does not affect the rights of any person, except for the Commonwealth, as at the date of registration and does not impose liabilities on any person. The application of the Act extends through subordinate instruments, specifically, the Customs Tariff Act 1995, which sets out the prescribed rate of duty for the goods. Exclusions or exemptions are limited to goods specified in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order.
Key Provisions
The Customs Act 1901, as detailed in the Explanatory Statement for Tariff Concession Instrument No. 0931863, allows for the creation of Tariff Concession Orders (TCOs) under section 269F (1) to provide lower rates of customs duty for specific goods. An application for a TCO must be made to the Chief Executive Officer of Customs (CEO) by a person, who can be a manufacturer, importer, or another interested party. If the CEO determines that the application is not for goods that are excluded under section 269SJ, they must then assess whether the application meets the core criteria set out in section 269C. This assessment hinges on whether any substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
The obligations imposed by the Act on the CEO include a thorough evaluation of the TCO application against the specified criteria. Section 269C requires the CEO to ensure that the goods in question are not substitutable by any goods produced in Australia. This definition of 'substitutable goods' is further clarified by sections 269D and 269E, which respectively define 'goods produced in Australia' and 'ordinary course of business'. Additionally, the CEO is mandated under subsection 269K(1) to publish a notice in the Gazette inviting any interested parties to submit objections to the proposed TCO. In the case of TCO No. 0931863, no submissions were received.
Failure to comply with the provisions of the Act can result in significant consequences. While the explanatory statement does not explicitly list offences, breaches of the Customs Act can lead to civil and criminal penalties. For instance, knowingly making a false statement in an application can result in a criminal offence, with penalties including fines of up to $22,200 or imprisonment for up to two years, or both. Additionally, incorrect claims for refunds or concessions can be subject to financial penalties and interest, as per the relevant regulations. The Act also provides for the imposition of additional duties if it is found that a TCO was improperly obtained.