EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936997
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.
Orica Australia Pty Ltd applied for a TCO in respect of certain liquid and/or gas transfer marine loader arms on 01 October 2009.
Instrument
TCO No 0936997 was made on 30 December 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. 0936997 is taken to have come into force on 01 October 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. 0936997, enacted under the Customs Act 1901, was introduced to address the issue of applying tariff concessions on specific goods, namely certain liquid and/or gas transfer marine loader arms, for which Orica Australia Pty Ltd had submitted an application. The purpose of this legislation is to facilitate the concession of customs duty for particular goods, provided they meet certain criteria such as not having substitutable goods produced in Australia in the ordinary course of business. The Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs and, once approved, these orders lower the customs duty rates for the specified goods, as evidenced by the zero-rated duty for the marine loader arms in question. This legislative instrument ensures that the rights of importers are protected and potentially enhanced, allowing them to apply for refunds of any duties paid prior to the TCO’s effective date.
Scope and Application
The Tariff Concession Instrument No. 0936997 under the Customs Act 1901 applies to specific goods—namely, certain liquid and/or gas transfer marine loader arms—that are the subject of a Tariff Concession Order (TCO). This instrument is applicable to any person or entity involved in the importation of these goods, thereby providing them with the benefit of a reduced rate of customs duty. The instrument operates within the framework of the Customs Act, specifically under Part XVA, which governs the making of TCOs by the Chief Executive Officer of Customs. The geographic reach of this legislation is national, as it applies across Australia and adheres to the provisions of the Customs Act 1901. The TCO excludes any goods that are specified in section 269SJ of the Act, which details the goods that cannot be subject to a TCO. The commencement date for this particular TCO, effective from 1 October 2009, aligns with the date of application, ensuring that the rights of importers are protected without imposing any new liabilities or disadvantages.
Key Provisions
The key operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), require the Chief Executive Officer of Customs (CEO) to consider applications for tariff concessions on certain goods (s 269F). The CEO must decide if the application meets the core criteria outlined in sections 269C and 269B, which include considerations of whether substitutable goods are produced in Australia and whether the goods are produced in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order (TCO) (s 269P(3)). The Explanatory Statement provides a clear example of this process with the application and subsequent approval of TCO No. 0936997 for certain liquid and/or gas transfer marine loader arms, which was declared to have a duty-free rate of 5%.
The Act imposes several obligations on the CEO, including the requirement to publish a notice in the Gazette inviting submissions from interested parties if they believe there are reasons why the TCO should not be made (s 269K(1)). Additionally, the CEO must ensure that the TCO does not affect the rights of any person adversely as at the date of registration, nor impose any liabilities on any person in respect of anything done or omitted before the date of registration (s 269S(1)). The CEO is also responsible for ensuring that the TCO is taken to have come into force on the day the application was lodged, as illustrated in TCO No. 0936997.
Breaches of the provisions under the Customs Act 1901 can result in both civil and criminal consequences. While specific offences, penalties, or maximum penalties are not detailed in the Explanatory Statement, the Act generally provides for enforcement actions, including fines and potential imprisonment for serious violations. The implications of failing to comply with the TCO requirements could result in financial penalties for the entities involved, as well as legal actions that might be taken by the Commonwealth. The rights of importers are protected under this Act, as they can apply for a refund of duty on goods imported since the TCO is deemed to have come into force, further highlighting the importance of adherence to the statutory requirements.