EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940034
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.
Wren Oil applied for a TCO in respect of certain clay filtration system on 23 October 2009.
Instrument
TCO No 0940034 was made on 25 January 2010. It declares that those certain clay filtration system 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. 0940034 is taken to have come into force on 23 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, provides a framework for the regulation of customs and excise duties. This includes the provision for Tariff Concession Orders (TCOs), which can lower customs duty rates on specific goods, and were introduced to address the need for economic incentives to encourage the production of certain goods within Australia. The Tariff Concession Instrument No. 0940034, made on 25 January 2010, is one such order that aims to provide a tariff concession for certain clay filtration systems by setting their duty rate at free, instead of the general rate of 5%. The instrument was introduced after Wren Oil applied for the concession on 23 October 2009, and the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria under section 269C of the Act. The policy objective is to facilitate the importation of these goods without the burden of customs duty, thereby supporting the availability and affordability of such products in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0940034, made under the Customs Act 1901, applies to any person or entity seeking a tariff concession order (TCO) for certain goods, specifically clay filtration systems in this instance, and those goods themselves. The application of the instrument is national in scope, being a Commonwealth act, and extends to all entities and persons involved in the importation of the specified goods. The TCO mechanism is designed to provide a lower rate of customs duty on goods that are not substitutable by Australian-made products, thereby incentivising imports where local production does not meet the demand. The Act does not apply to goods specified in section 269SJ, which outlines those that cannot be subject to a TCO. Additionally, the application of the TCO is effective from the date of application lodgement, as per the commencement provisions outlined in the Act. The TCO does not impose any liabilities on persons, other than the Commonwealth, and does not disadvantage any person's rights as they stood before the TCO's effective date.
Key Provisions
The main operative sections of this legislation concern the creation and application of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for the application of a TCO by a person to the Chief Executive Officer of Customs (CEO). If the CEO is satisfied that the application is valid and meets the core criteria outlined in sections 269C and 269P, they must make a written order (section 269P(3)) declaring that the specified goods are subject to a lower rate of customs duty. This particular TCO, No. 0940034, was made on 25 January 2010 for certain clay filtration systems, and it specifies that these goods are now subject to a free rate of duty, down from the general rate of 5% (Schedule 4, item 50 of the Customs Tariff Act 1995).
The Act imposes several obligations on the parties involved. The CEO must ensure that any application for a TCO is assessed against the core criteria specified in sections 269C and 269P of the Customs Act 1901. This includes verifying that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. Additionally, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, no submissions were received.
There are no specific offences or penalties mentioned in the explanatory statement for failing to comply with the Act's requirements. However, the Act generally provides for various civil and criminal penalties for breaches related to customs duties and associated regulations. These penalties can include fines and imprisonment for wilful or negligent breaches, depending on the nature and severity of the offence. The Customs Act 1901, along with the Customs Regulations 1993, contains detailed provisions regarding these penalties, which may apply if any party fails to comply with the Act's requirements.