EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942234
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.
Areva T & D Pty Ltd applied for a TCO in respect of certain transformer oil coolers on 09 November 2009.
Instrument
TCO No 0942234 was made on 15 January 2010. It declares that those certain transformer oil coolers 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. 0942234 is taken to have come into force on 09 November 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, provides a framework for the regulation of customs duties and tariffs. Specifically, Part XVA of the Act enables the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) that reduce the rate of customs duty on certain goods. The Act was introduced to address the need for tariff concessions in cases where goods are imported and no similar goods are produced domestically, thus encouraging the importation of these goods and potentially stimulating economic activity. The policy objective behind this legislation is to provide relief from customs duties for imported goods that have no domestic substitutes, thereby promoting trade and supporting industries reliant on these imported goods.
In 2010, Tariff Concession Instrument No. 0942234 was issued under this Act, following an application by Areva T & D Pty Ltd for certain transformer oil coolers. The CEO was satisfied that no substitutable goods were produced in Australia, leading to the concession of a lower duty rate, specifically zero per cent, on these goods. This instrument was made in accordance with the Act's provisions, ensuring that the rights of third parties were not adversely affected, and it came into force on the date the application was lodged, 9 November 2009.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the application and issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This legislation enables the reduction of customs duties on certain goods, provided the application for a TCO meets the specified criteria, such as the absence of substitutable goods produced in Australia at the time of application. This process is applicable to entities or individuals seeking tariff concessions for goods, ensuring that the application is not for goods explicitly excluded by section 269SJ of the Act. The scope of the Act is Commonwealth-wide, and it extends its reach to the entire nation through subordinate instruments, which may further define or refine the application of TCOs. The TCOs do not retroactively affect the rights or impose liabilities on any person other than the Commonwealth, thereby safeguarding the interests of those who might have already imported goods before the concession order was registered.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0942234, as part of the Customs Act 1901, pertain to the establishment of Tariff Concession Orders (TCOs) which can lower the rate of customs duty on specified goods. Section 269F (3) allows for applications to be made by individuals to the Chief Executive Officer of Customs (CEO) for a TCO. Section 269C stipulates that for an application to meet the core criteria, no substitutable goods can be produced in Australia on the day the application was lodged. The CEO's satisfaction of these criteria is crucial, leading to the issuance of a written order, a TCO, under section 269P(3). This order declares that the goods in question are subject to a prescribed rate in the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must assess the validity of TCO applications against the criteria set out in the Act. Upon receiving a valid application that meets the core criteria, the CEO is required to make a TCO. Section 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the issuance of a TCO. This ensures transparency and allows for public scrutiny of the TCO application process. The CEO's decision must be made in accordance with the statutory requirements, and failure to adhere to these obligations may lead to legal challenges.
The Act delineates specific offences and penalties for breaches of its provisions. Although the explanatory statement does not explicitly outline penalties for failing to comply with TCO regulations, breaches of the Customs Act 1901 generally can result in substantial fines and imprisonment. For instance, under section 269Q, the CEO may face civil penalties for failing to make a TCO when the core criteria are satisfied. Additionally, section 284-1 of the Act imposes criminal penalties, including fines and imprisonment, for knowingly making a false statement in an application or for other fraudulent activities related to the TCO process. The maximum penalties can be severe, reflecting the seriousness with which the Act treats compliance issues.