EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940169
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.
Melbourne Precast Concrete applied for a TCO in respect of certain concrete delivery system on 23 October 2009.
Instrument
TCO No 0940169 was made on 20 January 2009. It declares that those certain concrete delivery 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. 0940169 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, addresses the need for a structured scheme under which Tariff Concession Orders (TCOs) can be issued to reduce the customs duty on specific goods. The Act facilitates applications for TCOs by interested parties, with the Chief Executive Officer of Customs having the authority to grant these concessions under Part XVA. This scheme aims to stimulate economic activity by lowering the cost of imported goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The process involves a public notice and consultation period to ensure transparency and fairness. Tariff Concession Instrument No. 0940169, for instance, was issued in response to an application by Melbourne Precast Concrete for a TCO on certain concrete delivery systems, resulting in a duty-free status for these goods. This instrument underscores the policy objective of fostering competitive imports while ensuring that the rights of importers are protected and that no retroactive liabilities are imposed.
Scope and Application
The Tariff Concession Instrument No. 0940169, under the Customs Act 1901, applies to specific goods identified in the instrument, namely certain concrete delivery systems. This Act allows the Chief Executive Officer of Customs to provide tariff concessions on imported goods if certain criteria are met, specifically if no substitutable goods are produced in Australia at the time of the application. The instrument benefits the importer of these goods by applying a zero rate of customs duty, as opposed to the general rate of 5%, thus providing a tariff concession. The application of the instrument is governed by the Customs Act 1901, which is a Commonwealth Act, meaning it has a national jurisdictional reach across Australia. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person for actions taken before its registration. The instrument's scope can be extended or modified through subordinate instruments, which may include further specifications or clarifications related to the goods or the conditions of the concession.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. 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 are ineligible for a TCO, the CEO must decide whether the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the goods are subject to a prescribed tariff item, as specified in section 269P(3). This allows for a lower rate of customs duty to apply to the goods.
The Customs Act imposes certain obligations and requirements on the parties involved. The CEO is responsible for determining whether a TCO application meets the core criteria, which involves assessing whether no substitutable goods were produced in Australia on the day the application was lodged. The applicant, such as Melbourne Precast Concrete in this case, must ensure that their application is valid and provides all necessary information to satisfy the CEO. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. These provisions ensure that the TCO process is transparent and that all interested parties have an opportunity to be heard.
Breaches of the provisions under the Customs Act can lead to various civil and criminal consequences. For instance, if a person knowingly makes a false or misleading statement in an application for a TCO, they may be subject to a penalty. Under section 284-15 of the Crimes Act 1914, a person can be fined up to 10,000 penalty units or imprisoned for up to five years, or both, for making such a statement. Additionally, any person who fails to comply with the provisions of the Customs Act, such as not adhering to the tariff rates set out in a TCO, may face civil penalties. For example, under section 283 of the Customs Act, a person who contravenes a provision of the Act may be liable to pay a pecuniary penalty of up to 10,000 penalty units. These penalties underscore the importance of compliance with the Act and the seriousness of any breaches.