EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936288
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.
GBC Scientific Equipment Australia applied for a TCO in respect of certain melting and fusing mineral sample burners on 25 September 2009.
Instrument
TCO No 0936288 was made on 18 December 2009. It declares that those certain melting and fusing mineral sample burners 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. 0936288 is taken to have come into force on 25 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise duties, including the administration of tariff concession orders (TCOs). The Tariff Concession Instrument No. 0936288, issued in 2009, addresses a specific gap in the Customs Act by allowing the Chief Executive Officer of Customs to grant tariff concessions for certain goods, such as melting and fusing mineral sample burners, when no substitutable goods are produced in Australia. This instrument was made to facilitate the import of these goods by reducing or eliminating customs duty, thereby supporting the policy objective of ensuring that Australian industries have access to competitively priced inputs necessary for their operations. The instrument came into force on the date the application was lodged, 25 September 2009, and does not retroactively affect the rights or impose liabilities on importers or other stakeholders.
Scope and Application
The Tariff Concession Instrument No. 0936288 under the Customs Act 1901 applies to certain melting and fusing mineral sample burners for which GBC Scientific Equipment Australia has applied for tariff concessions. The application of this legislation pertains to entities and persons who import these specific goods into Australia, thereby potentially benefiting from reduced customs duty rates. The Act applies on a national level within the Commonwealth of Australia, providing a streamlined process for the Chief Executive Officer of Customs to evaluate and approve tariff concession orders for goods that meet the specified criteria and are not produced domestically. As per the legislative framework, a tariff concession order becomes effective on the date the application is lodged, with the CEO required to publish a notice in the Gazette inviting any objections before making a decision. Exclusions apply to goods that are specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a tariff concession order. This instrument does not disadvantage any person or impose liabilities for actions taken before its registration and does not affect the rights of persons other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0936288 (TCO No. 0936288) under the Customs Act 1901 require the Chief Executive Officer (CEO) of Customs to assess applications for tariff concessions and make orders if certain criteria are met (s 269F). If the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, they must make a written order (s 269P(3)). This order then applies a prescribed lower rate of customs duty to the specified goods. For TCO No. 0936288, the CEO determined that no substitutable goods were produced in Australia, thus granting a tariff concession on certain melting and fusing mineral sample burners (s 269C, s 269D, s 269E, and s 269P(3)).
The Act imposes certain obligations on the parties it governs. Any person may apply to the CEO for a TCO if the goods in question are not specified in section 269SJ of the Act (s 269F). The CEO must then assess whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia on the day the application was lodged (s 269C). If these criteria are met, the CEO must make a written order, known as a TCO, specifying the lower rate of duty applicable to the goods (s 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections to the proposed TCO (s 269K(1)). In this instance, no submissions were received, allowing the TCO to proceed.
In terms of consequences for breach, the Customs Act 1901 does not specify offences or penalties directly related to the process of applying for or granting a TCO. However, any misuse or fraud in the application process or in the use of the concession could potentially lead to criminal charges under other sections of the Act. For example, knowingly making a false statement in an application could lead to penalties as outlined under section 237 of the Act, which includes fines and imprisonment. The specific penalties would depend on the nature and severity of the offence.
The Tariff Concession Instrument No. 0936288 ensures that the rights of individuals and entities other than the Commonwealth are protected, meaning that no existing rights are adversely affected or new liabilities imposed (s 269S(1)). This means that while the concession benefits importers by allowing them to apply for refunds of duty paid on goods imported since the TCO came into force, it does not impose any new liabilities on any person (s 269S(1), Reg 126(1)(r)). This careful framing ensures that the legislation operates within a fair and regulated framework, benefiting those entitled to the concessions while avoiding unintended consequences for other stakeholders.