EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1028249
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.
Qer Limited applied for a TCO in respect of certain shale oil centrifuges on 23 June 2010.
Instrument
TCO No 1028249 was made on 20 September 2010. It declares that those certain shale oil centrifuges 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. 1028249 is taken to have come into force on 23 June 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 Parliament of Australia, establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This framework addresses the need to facilitate the import of specific goods by reducing or eliminating customs duty for those goods when certain conditions are met. Section 269F of the Act allows for the application of TCOs to goods not specified in section 269SJ, which details the goods ineligible for such concessions. The policy objective is to encourage the importation of goods that are not produced domestically by ensuring that the application for a TCO meets the core criteria, such as the absence of substitutable goods produced in Australia. The Customs Act 1901 aims to support industries by providing tariff relief, thereby promoting competition and economic efficiency in the market.
Scope and Application
The Tariff Concession Instrument No. 1028249 under the Customs Act 1901 applies to specific goods, namely certain shale oil centrifuges, and provides for tariff concessions in the form of reduced customs duty rates for these goods. This instrument was made by the Chief Executive Officer of Customs (CEO) in response to an application by Qer Limited on 23 June 2010. The instrument became effective on the same date, and it specifies that these goods are subject to a free rate of duty, as opposed to the general rate of 5% applicable to such goods. The legislation ensures that the tariff concession does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, thereby protecting the rights of importers who can seek a refund for duties paid on these goods since the date of the TCO. The CEO is mandated to publish notices in the Gazette to invite submissions on the application, although in this case, no submissions were received. The scope of the Act extends to the entire Commonwealth of Australia, affecting all entities and individuals involved in the importation of these specified goods.
Key Provisions
The key sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include section 269F, which outlines the process for applying for a TCO, and section 269C, which details the core criteria that must be met for an application to be accepted. According to section 269F, any individual or entity can apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of specific goods. If the CEO determines that the application does not pertain to goods that cannot be subject to a TCO, as listed in section 269SJ, the CEO must then assess whether the application satisfies the core criteria. Section 269C specifies that an application meets these criteria if, on the date it was submitted, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed on parties by the Act include the requirement for the CEO to make a written order if the application meets the core criteria, as stipulated in section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not be granted. This ensures transparency and provides an opportunity for stakeholders to voice their concerns. In the case of TCO No. 1028249, the CEO did not receive any submissions, indicating that no party contested the grant of the TCO.
Should any party breach the conditions set out by the Act, the consequences can include both civil and criminal penalties. The Act does not explicitly state the maximum penalties for breaches; however, breaches of customs legislation generally carry significant fines and potential imprisonment under the Crimes Act 1914. For instance, providing false information in an application could lead to penalties under section 269H, which may include fines of up to $22,200 or imprisonment for up to two years, or both. Furthermore, failing to comply with a TCO could result in financial penalties and legal action for non-compliance with customs regulations.