EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0950008
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.
Esso Australia Resources applied for a TCO in respect of certain lifeboats on 23 December 2009.
Instrument
TCO No 0950008 was made on 12 March 2010. It declares that those certain lifeboats 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. 0950008 is taken to have come into force on 23 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, amended through the Tariff Concession Instrument No. 0950008, was enacted to address the specific issue of granting tariff concessions for certain goods that are not produced in Australia. The instrument was introduced to provide relief to importers by allowing them to apply for lower rates of customs duty on goods that do not have local substitutes. This process is overseen by the Chief Executive Officer of Customs, who must ensure that the application meets the core criteria set out in the Act. The policy objective is to facilitate trade by reducing the cost burden on importers, particularly for essential goods that are not manufactured domestically. The instrument came into effect on 23 December 2009, the date the application was lodged, and it ensures that no person is disadvantaged by the tariff concession, while allowing importers to apply for duty refunds on imports since the concession took effect.
Scope and Application
The Tariff Concession Instrument No. 0950008, made under the Customs Act 1901, applies to specific goods, namely certain lifeboats, as applied for by Esso Australia Resources. This instrument, which came into effect on the date the application was lodged, grants a tariff concession by exempting these goods from the general customs duty of 5% and imposing a duty of zero instead. The act and its subordinate instrument are applicable nationally and are managed by the Chief Executive Officer of Customs, who is responsible for determining whether an application meets the core criteria for a tariff concession. The legislation does not affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or incurs new liabilities as a result of the concession. Additionally, the process includes a requirement for the CEO to publish a notice in the Gazette and invite submissions from any interested parties, although in this instance, no submissions were received.
Key Provisions
The primary operative sections of this legislation, specifically sections 269C, 269F, 269K, and 269P, establish the framework for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods, while section 269C stipulates that such an application meets the core criteria if, at the time of lodging, no substitutable goods are produced in Australia in the ordinary course of business. Section 269K mandates the CEO to publish a notice in the Gazette inviting submissions from interested parties if an application is deemed valid. If no submissions are received, the CEO is required to proceed with the order. Section 269P allows the CEO to issue a written TCO if satisfied that the application meets the core criteria, as outlined in section 269C.
The Act imposes specific obligations on the CEO of Customs. The CEO must determine whether an application for a TCO meets the core criteria as defined in section 269C. If the CEO is satisfied that the application meets these criteria, they must make a written TCO as per section 269P. Additionally, the CEO is required to publish a notice in the Gazette under section 269K, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. The CEO must consider any submissions received and decide whether to proceed with the TCO. If no submissions are received, the CEO is obligated to issue the TCO.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the Act for breaches related to the issuance of TCOs. However, any failure by the CEO to comply with the obligations outlined in the Act, such as not publishing a notice in the Gazette or not considering valid submissions, could potentially lead to legal challenges or administrative actions. The Act focuses more on the procedural requirements for issuing TCOs rather than penalising specific breaches.