EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946167
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.
Kirby Marine Fabrication applied for a TCO in respect of certain marine saddles seats on 06 January 2009.
Instrument
TCO No 0946167 was made on 27 March 2009. It declares that those certain marine saddles seats 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. 0946167 is taken to have come into force on 06 January 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 Tariff Concession Instrument No. 0946167, enacted in 2009, addresses a specific gap in the Customs Act 1901 by facilitating tariff concessions for certain imported goods, in this case marine saddles seats, which were applied for by Kirby Marine Fabrication on 6 January 2009. This instrument was enacted to provide relief from customs duty for goods that are not produced domestically and for which there are no suitable substitutes, thereby encouraging the importation of such goods. The enacting body is the Chief Executive Officer of Customs, who must ensure that the application meets the core criteria set out in the Customs Act 1901 before issuing a Tariff Concession Order (TCO). The primary policy objective is to support industries that rely on the import of specific goods not locally manufactured, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0946167 under the Customs Act 1901 applies to individuals or entities that seek tariff concessions on goods imported into Australia. Specifically, it pertains to applications for Tariff Concession Orders (TCOs) made to the Chief Executive Officer of Customs, who has the authority to grant such concessions if certain criteria are met. This process primarily benefits importers by potentially reducing the customs duty on specified goods, such as the marine saddles seats in this instance, from the general rate to a free rate as prescribed under the Customs Tariff Act 1995. The scope of this legislation is national, given that it operates under the authority of the Commonwealth of Australia. The Act does not specify exclusions or exemptions within the TCO itself, but it does refer to the broader exclusions outlined in section 269SJ of the Customs Act 1901, which details goods that cannot be subject to a TCO. Additionally, the application of the TCO is retrospective to the date of the application, ensuring that no pre-existing rights or liabilities are adversely affected. The legislation also allows for the potential for further adjustments or applications under subordinate instruments, as the Act can be extended or modified through additional regulations or orders.
Key Provisions
The Customs Act 1901 (section 269F) outlines a procedure for the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCO) to reduce customs duty on certain goods. If a person applies for a TCO (section 269F), the CEO must consider whether the application meets the core criteria set out in section 269C, which involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business. Once these criteria are met, the CEO must issue a written order declaring the goods to which the concession applies (section 269P(3)). In this case, Tariff Concession Order No. 0946167 was made on 27 March 2009 for certain marine saddle seats, reducing the duty from a general rate of 5% to free.
The Act imposes several obligations on parties involved with TCOs. Firstly, applicants must ensure their applications meet the criteria outlined in section 269C of the Act. The CEO is obligated to review these applications and decide whether they meet the criteria (section 269P(3)). Upon acceptance, the CEO must publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). Additionally, the Act mandates that a TCO comes into force on the day the application is lodged (subsection 269S(1)).
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal consequences. While the explanatory statement does not specify particular offences or penalties, breaches of the Customs Act generally can lead to fines and imprisonment. For instance, section 284 of the Act imposes penalties for making false statements or providing false information, which can include fines up to 10,000 penalty units or imprisonment for up to two years, or both. Similarly, section 285 addresses the offence of evading duty or improperly claiming drawback, with penalties including fines of up to 20,000 penalty units and imprisonment for up to five years, or both.
The Tariff Concession Order No. 0946167 ensures that the rights of importers are beneficially affected, allowing them to apply for refunds of duty on goods imported since the order's effective date (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the order's registration. This ensures that the order operates prospectively, without affecting past transactions or liabilities.