EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933951
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.
N & H Distributors applied for a TCO in respect of certain intermodal prefabricated buildings on 11 September 2009.
Instrument
TCO No 0933951 was made on 27 November 2009. It declares that those certain intermodal prefabricated buildings 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. 0933951 is taken to have come into force on 11 September 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, provides a framework for the regulation of customs and excise through various instruments, including Tariff Concession Orders (TCOs). The Act was introduced to facilitate the administration of customs duties and tariffs, ensuring they are applied fairly and effectively across imported goods. The explanatory statement for Tariff Concession Instrument No. 0933951, made under the Customs Act, details the process and decision-making involved in granting a TCO for specific intermodal prefabricated buildings. The primary objective is to provide tariff concessions for goods that are not produced in Australia and for which no substitutable goods exist, thus encouraging trade and benefiting importers by reducing duty rates from the general rate of 5% to free duty for these specified goods.
Scope and Application
The Tariff Concession Instrument No. 0933951 under the Customs Act 1901 applies specifically to certain intermodal prefabricated buildings, as identified in the instrument, and operates within the framework established by Part XVA of the Act. This legislation allows for the concession of customs duty rates for specific goods, provided that these goods are not prohibited by section 269SJ of the Act and meet the core criteria outlined in section 269C. In this instance, the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby satisfying the conditions for the concession. This instrument is applicable from the date the application was lodged, which is 11 September 2009, and benefits importers by providing a zero rate of duty on these goods, down from the general rate of 5%. Importantly, the concession does not affect any pre-existing rights or liabilities of individuals or entities, apart from the Commonwealth, ensuring that the commencement of the TCO does not disadvantage anyone or impose new liabilities.
Key Provisions
The Customs Act 1901 establishes a framework through which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) as outlined in Part XVA of the Act (sections 269C, 269F, 269P). A TCO applies a lower rate of customs duty to the specified goods. A TCO application can be submitted to the CEO by any person under section 269F, provided the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO determines that the application meets the core criteria under section 269C, they must issue a written TCO. These core criteria require that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively.
The Act imposes certain obligations on the CEO when processing a TCO application. Once an application is accepted as valid, the CEO must publish a notice in the Gazette under subsection 269K(1), inviting submissions from any interested parties who believe the TCO should not be granted. In this instance, no submissions were received. The CEO is also required to decide whether the application meets the core criteria and, if satisfied, issue a TCO under subsection 269P(3). The TCO must specify the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
In terms of enforcement, breaches of the provisions under the Customs Act 1901 can lead to various consequences. While the explanatory statement does not specify particular offences related to TCOs, general breaches of customs legislation can incur civil or criminal penalties. The maximum penalties for breaches depend on the specific nature of the offence but can include substantial fines and, in some cases, imprisonment. It is essential for entities and individuals subject to the Act to comply with its provisions to avoid these potential repercussions.