EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949780
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.
Petrocoating Systems applied for a TCO in respect of certain protective coating film on 22 December 2009.
Instrument
TCO No 0949780 was made on 12 March 2010. It declares that those certain protective coating film 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. 0949780 is taken to have come into force on 22 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 Customs Act 1901, enacted by the Parliament of Australia, established a framework for applying lower rates of customs duty to goods through Tariff Concession Orders (TCOs). The Act aimed to provide relief to certain goods by reducing their duty rates, provided that no substitutable goods were produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0949780 details that Petrocoating Systems applied for a TCO for certain protective coating film, and the Chief Executive Officer of Customs granted this concession on 12 March 2010. The instrument declared that the specified protective coating film would be subject to a free rate of duty, down from the general rate of 5%. This legislative measure ensures that importers can benefit from reduced duty rates on these goods, effective from the date the application was lodged, 22 December 2009.
Scope and Application
The Tariff Concession Instrument No. 0949780, made under Part XVA of the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO), and it aims to lower the customs duty rate on these goods. The CEO of Customs can make such an order if satisfied that no substitutable goods are produced in Australia in the ordinary course of business and that the application meets the core criteria. The Act's application is triggered by an application from a person, such as Petrocoating Systems, who seeks a TCO for certain goods. The geographic reach of this legislation is national, as it applies to all entities importing the specified goods into Australia, and the TCO will be effective from the date the application was lodged. Any person considering opposing the TCO can lodge a submission, although in this case, no submissions were received. The Act does not disadvantage any person except the Commonwealth and does not impose any liabilities on any person regarding actions before the TCO's registration. The TCO allows importers to apply for a refund of duty on the specified goods imported since the effective date. The application and scope of the TCO can be extended or restricted through subordinate instruments, as outlined in the Act.
Key Provisions
The main operative sections of this legislation, particularly sections 269C, 269B, 269D, 269E, and 269P(3) of the Customs Act 1901, establish the criteria for making Tariff Concession Orders (TCOs) and the conditions under which the Chief Executive Officer of Customs (CEO) must grant them. Specifically, section 269C mandates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Furthermore, sections 269B, 269D, and 269E provide definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Once the CEO is satisfied that the application meets these criteria, section 269P(3) requires the CEO to issue a written TCO.
The obligations and requirements imposed by the Act are primarily centred on the CEO’s duty to evaluate TCO applications and ensure they meet the specified criteria. Section 269F allows a person to apply for a TCO, but the CEO must first confirm that the application does not pertain to goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Once a valid application is received, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from interested parties. The CEO must then decide whether the application meets the core criteria, as outlined in section 269C. If satisfied, the CEO must make a TCO as stipulated in section 269P(3).
Regarding the consequences of non-compliance, the Customs Act 1901 does not explicitly detail specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, the failure to adhere to the outlined procedures for applying and processing TCOs could potentially lead to legal challenges or disputes regarding the validity of the TCO. The Act ensures that the rights of importers are protected, and they may apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, and it does not affect the rights of a person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken prior to the TCO's registration.