EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937253
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.
Adi Munitions applied for a TCO in respect of certain tracer ammunition projectiles on 02 October 2009.
Instrument
TCO No 0937253 was made on 18 December 2009. It declares that those certain tracer ammunition projectiles 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. 0937253 is taken to have come into force on 02 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 Customs Act 1901, enacted by the Parliament of Australia, includes provisions under Part XVA that allow for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. This legislation was introduced to address the need for tariff concessions on specific goods, ensuring that such concessions only apply when certain criteria are met, such as the absence of substitutable goods produced in Australia. The primary policy objective is to facilitate the import of goods by providing reduced customs duty rates under specific conditions, thereby potentially lowering costs for importers and increasing accessibility to certain products. In the case of Tariff Concession Instrument No. 0937253, concerning tracer ammunition projectiles, the legislation aims to provide a zero rate of duty for these goods, effective from the date the application was lodged, provided that no substitutable goods are produced domestically.
Scope and Application
The Tariff Concession Order No. 0937253 under the Customs Act 1901 applies to the specific goods—certain tracer ammunition projectiles—for which Adi Munitions applied for a concession. This Act allows for the application of a lower rate of customs duty on goods that are the subject of a Tariff Concession Order, provided that the application meets the core criteria set out in the legislation. The geographic reach of this Act is national, as it pertains to goods entering Australia and is governed by the Commonwealth. The Act excludes any goods specified in section 269SJ, which details those goods that cannot be subject to a Tariff Concession Order. The CEO must ensure that the application is not for such excluded goods before proceeding with the concession. This Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which further defines the rates of duty applicable to various goods. The order does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person for actions taken before the order was registered.
Key Provisions
The main operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application is not in relation to goods specified in section 269SJ, which includes goods that cannot be subject to a TCO, the CEO must assess if the application meets the core criteria under section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a written order under section 269P(3) declaring that the goods in question are subject to a lower rate of customs duty.
The Customs Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, the applicant must ensure that their application is not in respect of goods specified in section 269SJ. Secondly, the CEO must assess the application against the core criteria outlined in section 269C, which involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. If no submissions are received, the CEO proceeds with the order.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for breaches of the provisions related to TCOs. However, the Act does provide a framework for the CEO to decide on applications and issue orders based on the criteria outlined. The primary focus of the legislation is on facilitating tariff concessions for specific goods, ensuring that they are not already being produced in Australia, and providing a transparent process for interested parties to voice their concerns.