EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936508
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.
Australian Paper applied for a TCO in respect of certain pneumatic actuators on 28 September 2009.
Instrument
TCO No 0936508 was made on 18 December 2009. It declares that those certain pneumatic actuators 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. 0936508 is taken to have come into force on 28 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 Australian Parliament, includes provisions for Tariff Concession Orders (TCOs) that allow for lower rates of customs duty on specified goods. This was introduced to address the problem of ensuring that Australian businesses can compete fairly in the global market by reducing the cost of importing certain goods. The Tariff Concession Instrument No. 0936508, made under this Act, specifically targets certain pneumatic actuators by granting them a free rate of duty instead of the general rate of 5%. The instrument was created after Australian Paper applied for the concession on 28 September 2009, and it came into effect on the same day, ensuring no disadvantage to importers who had already imported the goods before the concession was registered. The policy objective of this concession is to support the local production of these goods and provide a tariff advantage to importers, thereby encouraging fair trade practices.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide for reduced customs duties on specified goods, provided certain criteria are met. The Act applies to any person who applies for a TCO in respect of goods, and the scope of the concession is limited to goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods exist domestically. The geographical reach of this Act is national, as it pertains to the customs regulations across Australia. The application of this Act can be extended or restricted through subordinate instruments, which may detail specific conditions or additional criteria for TCOs. The TCO in question, Instrument TCO No 0936508, pertains to certain pneumatic actuators, and its application is effective from the date of the application, 28 September 2009, without retroactive impact on any pre-existing rights or liabilities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0936508, as outlined in the Explanatory Statement, focus on the process and criteria for granting Tariff Concession Orders (TCO) under section 269F of the Customs Act 1901. The CEO of Customs is mandated to decide whether an application for a TCO meets the core criteria as specified in sections 269B, 269C, 269D, and 269E. If the application meets the criteria, the CEO must issue a written TCO order under section 269P(3). The particular instrument, TCO No. 0936508, was made on 18 December 2009, and it declares that certain pneumatic actuators are subject to a lower duty rate as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on parties and entities primarily involve the process for applying for a TCO. The applicant must ensure their application complies with the core criteria outlined in the Act, particularly that no substitutable goods are produced in Australia. The CEO has an obligation to assess the application, publish a notice in the Gazette inviting objections, and make a decision on the application based on the criteria. Additionally, the CEO must ensure that the rights of third parties are not adversely affected by the TCO.
The Act also outlines potential consequences for non-compliance or breach of the requirements. Under the Customs Act 1901, failure to comply with the terms of a TCO or any related obligations could result in civil or criminal penalties. Although the explanatory statement does not specify maximum penalties, it is known that breaches of the Customs Act can lead to substantial fines and imprisonment, depending on the severity of the breach. The precise penalties would be determined based on the specific breach and the relevant provisions of the Customs Act and associated regulations.