EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937732
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.
Baker And Provan Pty Ltd applied for a TCO in respect of certain jacks on 07 October 2009.
Instrument
TCO No 0937732 was made on 04 January 2010. It declares that those certain jacks 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. 0937732 is taken to have come into force on 07 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 was enacted to provide for the administration of customs and excise duties, and to manage the importation and exportation of goods in Australia. The 2010 Tariff Concession Instrument No. 0937732, created under this Act, aims to address the gap in tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to grant reduced customs duty rates, provided certain criteria are met. This particular instrument, which came into force on 7 October 2009, was introduced following an application by Baker And Provan Pty Ltd for tariff concessions on certain jacks, resulting in the concession of a lower rate of duty of 0% instead of the general rate of 5%. The instrument was made without any objections being raised by the public, and it ensures that the rights of importers are positively affected, allowing them to seek refunds for duties paid on imports since the instrument's effective date.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity seeking a reduction in the customs duty on imported goods through a TCO, provided that the goods do not fall under the category of items specified in section 269SJ of the Act which are ineligible for such concessions. The scope of the Act is national, as it is a Commonwealth Act, and it applies to transactions involving the importation of goods into Australia. The application process involves meeting core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must make a written order if these criteria are satisfied, specifying a lower rate of duty for the goods in question. This Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to goods under a TCO. The Act does not disadvantage any person by affecting their rights as at the date of registration of the TCO, and it does not impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0937732 under the Customs Act 1901 (the Act) is primarily concerned with the process and criteria for granting Tariff Concession Orders (TCOs) (section 269C). When a TCO is granted, it applies a lower rate of customs duty to specific goods, in this case, certain jacks, as outlined in the instrument. According to section 269F, any person can apply to the Chief Executive Officer of Customs (the CEO) for a TCO. If the application is valid and does not pertain to goods specified in section 269SJ, the CEO must assess whether it meets the core criteria set out in section 269C. Specifically, the CEO must determine if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)).
The obligations imposed by the Act on the CEO include the requirement to make a written TCO if the application meets the core criteria. The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). In this instance, the CEO did not receive any submissions, indicating no objections to the TCO. Additionally, the Act mandates that a TCO is considered to have come into force on the day the application was lodged (subsection 269S(1)). For TCO No. 0937732, this date is 07 October 2009.
In terms of consequences for breach, the Act does not explicitly detail offences or penalties for non-compliance with the TCO process or the terms of the TCO itself. However, any misuse or fraudulent claims regarding the eligibility for tariff concessions could potentially lead to civil or criminal penalties under other sections of the Customs Act or related legislation. The TCO ensures that it does not adversely affect the rights of any person as at the date of registration, thus safeguarding the rights of importers who can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).