EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001037
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.
Wesfil Australia applied for a TCO in respect of certain internal combustion engine filters on 07 January 2010.
Instrument
TCO No 1001037 was made on 22 March 2010. It declares that those certain internal combustion engine 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. 1001037 is taken to have come into force on 07 January 2010.
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. 1001037 was enacted in 2010 under the Customs Act 1901 to address the issue of applying tariff concessions for specific goods that are not produced domestically. This instrument was introduced to streamline the process by which businesses could apply for a Tariff Concession Order (TCO), enabling them to benefit from lower customs duties on certain imported goods. The instrument was developed in response to applications such as the one submitted by Wesfil Australia for internal combustion engine filters, which sought to reduce the duty from 5% to free, contingent upon the condition that no substitutable goods were produced in Australia. The instrument was designed to ensure that the rights of importers are beneficially affected, with no adverse impacts on existing rights or liabilities of any person, other than the Commonwealth, as a result of the concessions granted.
The Tariff Concession Instrument No. 1001037 was issued by the Chief Executive Officer of Customs, acting under the authority conferred by section 269F of the Customs Act 1901. The instrument came into effect on the date the application was lodged, 07 January 2010, and was made public in the Gazette, inviting submissions from interested parties. However, no submissions were received. The policy objective of this instrument is to facilitate the importation of goods that are not produced domestically, thereby supporting businesses by reducing the cost of importing necessary components.
Scope and Application
The Tariff Concession Instrument No. 1001037 under the Customs Act 1901 applies to certain internal combustion engine filters, specifically those for which Wesfil Australia submitted an application on 7 January 2010. This legislation targets the goods in question, which were granted a tariff concession order (TCO) by the Chief Executive Officer of Customs (CEO) upon satisfying the core criteria set out in the Act. The CEO's decision was based on the absence of substitutable goods produced in Australia on the date of the application. The TCO, which came into force on the date of the application, reduced the general duty rate of 5% to free duty for these specific goods. This act benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, without imposing any new liabilities on them or other entities. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia. The application of the TCO does not extend to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in response to this particular TCO.
Key Provisions
The Tariff Concession Instrument No. 1001037 under the Customs Act 1901 (section 269F) allows the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) that reduces customs duty on specified goods. The CEO is required to consider applications for TCOs, provided the goods in question are not listed in section 269SJ of the Act as ineligible. The CEO must assess if the application meets the core criteria outlined in sections 269C and 269P(3), specifically ensuring that no substitutable goods are produced in Australia on the application date. For the purpose of this assessment, 'substitutable goods' are defined as those produced in Australia that can be used in the same way as the goods for which the TCO is sought (sections 269B and 269D). If the CEO determines that the application meets these criteria, they must issue a TCO.
Entities governed by this Act must comply with the specified procedures for applying for a TCO and ensure that their applications are complete and meet the core criteria. The CEO is mandated to publish a notice in the Gazette inviting submissions from any person who believes a TCO should not be granted (subsection 269K(1)). This notice was published for TCO No. 1001037, but no submissions were received. The TCO itself, once issued, takes effect from the date the application was lodged, in this case, 7 January 2010 (subsection 269S(1)). Importers of the affected goods can apply for a refund of duty paid on imports made since the TCO's effective date (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not disadvantage or impose liabilities on any person for actions taken before its registration.
Breaching the conditions set out for a Tariff Concession Order may lead to civil or criminal consequences. For instance, if a party fails to comply with the requirements of the Act or the TCO, they could face penalties. The specific penalties are not detailed in the provided text, but generally, breaches of customs regulations can result in fines or other financial penalties. Additionally, any person who knowingly or negligently provides false or misleading information in an application for a TCO could be subject to criminal charges. These could include imprisonment or fines, although the exact penalties would depend on the specific circumstances and any relevant case law or regulations.