EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001653
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.
Boc Ltd applied for a TCO in respect of certain dry ice pelletisers on 08 January 2010.
Instrument
TCO No 1001653 was made on 26 March 2010. It declares that those certain dry ice pelletisers 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. 1001653 is taken to have come into force on 08 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This legislation addresses the need for a mechanism to lower customs duty rates on certain goods, thereby promoting economic efficiency and competitiveness. The primary objective of the Act, as evidenced by the explanatory statement, is to facilitate the application process for tariff concessions by ensuring that no substitutable goods are produced in Australia at the time of the application. This ensures that concessions are granted to imports that are genuinely needed and not readily available domestically. The explanatory statement outlines the process by which Boc Ltd successfully applied for a TCO for certain dry ice pelletisers, resulting in a tariff reduction from 5% to free, effective from the date of application.
Scope and Application
The Customs Act 1901, as amended through the Tariff Concession Instrument No. 1001653, applies to individuals or entities seeking tariff concessions on specific imported goods, where these goods are not produced in Australia in the ordinary course of business and no substitutable goods are produced domestically. This Act specifically pertains to the application process for Tariff Concession Orders (TCOs), which allow for reduced or waived customs duties on particular goods, subject to certain criteria. The legislation is administered by the Chief Executive Officer of Customs, who has the authority to grant TCOs if the application satisfies the outlined core criteria and does not involve goods excluded under section 269SJ of the Act. The geographic scope of this Act is national, extending to all imported goods across Australia, as it falls under the Commonwealth's jurisdiction. The Act does not impose liabilities on individuals or entities and does not disadvantage persons other than the Commonwealth by affecting rights as at the date of registration. Any subordinate instruments or regulations that might extend or restrict the application of this Act are not detailed in the provided explanatory statement but could be found in the Customs Regulations or related legislative instruments.
Key Provisions
The main operative sections of this legislation, found in Part XVA of the Customs Act 1901, establish a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (section 269F). A TCO can be applied for by any person and, if the application is not for goods specified in section 269SJ, it must be assessed against the core criteria (section 269C). If the application meets these criteria, the CEO must issue a TCO, specifying that the goods are subject to a particular item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The explanatory statement details that Boc Ltd applied for a TCO on certain dry ice pelletisers on 08 January 2010, and TCO No. 1001653 was issued on 26 March 2010, declaring that these goods are subject to item 50 of Schedule 4, with the general duty rate of 5% reduced to free.
The Act imposes certain obligations on the CEO and the applicants for a TCO. The CEO must ensure that any TCO application not disqualified under section 269SJ is assessed against the core criteria outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO determines that the criteria are met, they must issue a written TCO. Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed (subsection 269K(1)). In this case, no submissions were received.
The legislation also outlines the consequences for non-compliance. While the explanatory statement does not detail specific offences, penalties, or consequences for breach of the Act, it is implicit that failure to adhere to the prescribed process for issuing a TCO or providing false information in an application could lead to legal repercussions. Typically, under Australian law, breaches of customs regulations can result in civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. However, the exact penalties would need to be sought from the relevant sections of the Customs Act 1901 and the Customs Regulations 1994.