EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937373
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.
Sybic Australia applied for a TCO in respect of certain deioniser filter tanks on 02 October 2009.
Instrument
TCO No 0937373 was made on 18 December 2009. It declares that those certain deioniser filter tanks 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. 0937373 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 Australian Parliament, established a framework for the administration of customs duties and the regulation of goods entering and leaving the country. One significant aspect of this Act is the ability to issue Tariff Concession Orders (TCOs) under Part XVA, which allows the Chief Executive Officer of Customs to provide lower rates of customs duty on specific goods. This mechanism was introduced to address the need for tariff adjustments that could support certain industries by reducing the cost of imported goods that do not have Australian substitutes. Instrument No. 0937373, made under the authority of this Act, provides a tariff concession for certain deioniser filter tanks, reducing their duty rate to free, effective from 2 October 2009. This concession was granted following an application by Sybic Australia, and after no objections were received during the consultation period, the order came into force on the date of the application. The objective of this specific TCO is to facilitate the importation of these goods without the burden of customs duty, thereby benefiting importers and potentially supporting market competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0937373, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain deioniser filter tanks, and provides for a concessional rate of customs duty. This instrument is applicable to entities and individuals importing these specified goods into Australia, thereby reducing their duty obligations. The geographic and jurisdictional reach of this Act is national, as it pertains to customs duties across Australia. The application of this Instrument is limited to goods not produced in Australia and where no substitutable goods are produced domestically, in line with the criteria set out in section 269C of the Act. The Act does not specify exclusions or thresholds but operates on a case-by-case basis where an application is submitted and assessed by the Chief Executive Officer of Customs. The Act may extend its application through subordinate instruments, which may specify additional goods or modify existing concessions.
Key Provisions
Section 269F of the Customs Act 1901 (the Act) allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application pertains to goods that do not fall under the categories specified in section 269SJ of the Act and meets the core criteria outlined in section 269C, a TCO will be issued. Section 269C stipulates that the application meets the core criteria if, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. The definitions of "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269F of the Act respectively. Once the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) as per subsection 269P(3) of the Act.
Under the Customs Act 1901, the CEO is obligated to publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. If no submissions are received, the CEO must proceed with issuing the TCO. Additionally, the CEO must ensure that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, so as to not 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 Customs Act 1901 does not explicitly state any offences or penalties for breach of the TCO provisions. However, it is implied that any failure to comply with the conditions of the TCO could result in the imposition of the standard customs duty on the goods, as the TCO only applies to goods that meet the specified criteria. The maximum penalty for non-compliance with customs regulations is generally a fine of up to $22,200 and/or imprisonment for up to five years for individuals, and up to $111,000 and/or imprisonment for up to ten years for bodies corporate, as per section 283 of the Crimes Act 1914.