EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943738
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.
Inoxihip Australia applied for a TCO in respect of certain positive displacement pump parts on 19 November 2009.
Instrument
TCO No 0943738 was made on 26 February 2010. It declares that those certain positive displacement pump parts 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. 0943738 is taken to have come into force on 19 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 Australian Parliament, establishes the legal framework governing the importation and exportation of goods within Australia. A key feature of this legislation is the provision for Tariff Concession Orders (TCOs), which allow for the reduction or elimination of customs duties on specific goods. This mechanism was introduced to address the need for targeted tariff relief to support certain industries or address specific economic circumstances, thereby facilitating trade and supporting economic growth. The Tariff Concession Instrument No. 0943738, introduced in 2010, is an example of how this system operates in practice. This particular instrument was enacted to provide a tariff concession for certain positive displacement pump parts, recognising that no substitutable goods were produced in Australia, thus meeting the core criteria for such concessions. The policy objective underpinning this specific measure was to ensure that importers of these goods could benefit from a reduced duty rate, thereby enhancing their competitiveness and supporting the broader economic interests of the industry.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, enabling a lower rate of customs duty for specific goods. This legislative framework applies to any person or entity that seeks to import goods eligible for a TCO, provided these goods are not specified as excluded under section 269SJ of the Act. The application process requires that the goods in question have no substitutable alternatives produced in Australia, as defined under sections 269C, 269D, 269E, and 269F. The geographic scope of this legislation is national, affecting all jurisdictions within Australia. However, it does not impose any liabilities on persons other than the Commonwealth and does not disadvantage existing rights of parties as of the date of the TCO's registration. This Act's application can be extended or restricted through subordinate instruments, aligning with the overarching Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901, through its section 269F (1), allows for the application for a Tariff Concession Order (TCO) by any person seeking a lower rate of customs duty for specific goods. If the Chief Executive Officer (CEO) of Customs determines that the application pertains to goods not excluded by section 269SJ and meets the core criteria outlined in section 269C, the CEO must proceed to make a TCO. This order, detailed in section 269P(3), specifies that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a free duty rate instead of the general 5% rate for those goods.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is deemed valid under section 269K(1). This ensures transparency and allows for any objections to be raised. For the applicant, the primary obligation is to ensure that the application is made in accordance with the Act's stipulations and to provide all necessary information to substantiate the claim that no substitutable goods are produced in Australia. The CEO's obligations include assessing the application against the core criteria and making a decision based on this assessment.
Failure to comply with the provisions of the Customs Act 1901 can result in legal consequences. While specific offences and penalties are not detailed in the provided text, breaches of the Act could potentially lead to civil or criminal penalties. The maximum penalties for contraventions of the Customs Act can include fines and imprisonment, depending on the severity and nature of the breach. It is important for all parties to adhere to the Act's provisions to avoid these consequences.