EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0948286
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.
Mineworks Group Pty Ltd applied for a TCO in respect of certain diesel engine particulate filters on 10 December 2009.
Instrument
TCO No 0948286 was made on 05 March 2010. It declares that those certain diesel engine particulate filters 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. 0948286 is taken to have come into force on 10 December 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. 0948286, made under the Customs Act 1901, was enacted in 2010 to address the issue of applying lower customs duty rates to specific goods that are not produced in Australia and for which no substitutable domestic goods are available. This instrument aims to provide tariff concessions for certain diesel engine particulate filters, reducing their customs duty rate to zero, thus benefiting importers who have imported such goods since the effective date of the instrument. The instrument was made by the Chief Executive Officer of Customs, following a valid application by Mineworks Group Pty Ltd and after no objections were raised by any other parties. It came into effect on 10 December 2009, the day the application was lodged, and does not impose any liabilities on any person, nor does it disadvantage any rights as of the registration date.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply to specific goods for which a lower rate of customs duty is set, contingent on certain conditions being met by the applicant. An application for a TCO can be submitted by any person, provided that the goods in question are not specified as ineligible under section 269SJ of the Act. The CEO must then evaluate whether the application meets the core criteria, primarily whether substitutable goods are not produced in Australia at the time of application, as per section 269C. This application process and criteria are further defined in sections 269B, 269D, and 269E of the Act, which provide meanings for key terms such as "goods produced in Australia" and "ordinary course of business". If the CEO determines that the application satisfies these criteria, a TCO is issued, and the goods in question are subject to the specified lower duty rate outlined in the Customs Tariff Act 1995. The process ensures that the application of these concessions is both fair and narrowly tailored to those cases where it is justified based on the absence of local production of substitutable goods.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0948286 are found in Part XVA of the Customs Act 1901. Specifically, sections 269C, 269F, 269P, and 269SJ are pivotal. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the application is deemed not to be in respect of goods specified in section 269SJ, the CEO must assess if it meets the core criteria, primarily under section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If satisfied, the CEO issues a written order (TCO) as per section 269P(3). The instrument in question, TCO No. 0948286, was issued on 5 March 2010, applying a zero duty rate to certain diesel engine particulate filters.
The obligations imposed by the Act on the parties and entities it governs are primarily centred on the application and assessment process for TCOs. The CEO is mandated to ensure that the application for a TCO is not in respect of prohibited goods, as specified in section 269SJ. The CEO must also verify that no substitutable goods were produced in Australia at the time of application, as per section 269C. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit objections if they believe the TCO should not be made. The CEO must also ensure that the TCO does not adversely affect the rights of any person, except the Commonwealth, and does not impose any new liabilities, as per subsection 269S(1).
In terms of breaches and consequences, the Act does not explicitly outline offences or penalties for failing to comply with the requirements of the TCO process. However, any failure to adhere to the conditions set forth by the CEO in issuing a TCO could potentially lead to legal disputes or challenges, particularly if the TCO is found to be improperly granted. The Act ensures that the rights of importers are protected, and they can apply for a refund of duty under Regulation 126(1)(r) for goods imported since the TCO came into effect. While specific penalties are not detailed, any improper actions by the CEO in issuing a TCO could be subject to review or challenge under existing administrative law principles, which could result in corrective actions or compensation if found to be in breach of statutory obligations.