EXPLANATORY STATEMENT
Tariff Concessions Revocation Instrument 19/2009
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 and revoked 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 sections 269C and 269P of the Act, a TCO will be made if the application for the TCO meets the core criteria, that is, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
Section 269SB of the Act provides, in part, that a person claiming to be a producer in Australia of substitutable goods in relation to the goods covered by a TCO may request the CEO to revoke the TCO.
Under subsection 269SC(1) of the Act, the CEO must decide whether of not her or she is satisfied:
− that, on the day of lodgement of the request, the person requesting the revocation of the TCO is a producer in Australia of goods that are substitutable goods in relation to the goods the subject of the TCO;
− that, if the TCO were not in force on that day but that day were the day on which the application for that TCO was lodged, the CEO would not have made the TCO.
If the CEO is satisfied of those matters but is also satisfied that a narrower TCO could have been made on the day the request to revoke was lodged, the TCO must revoke the TCO and make, in its place, such a narrower TCO (subsection 269SC(4) refers).
Boronia Technologies Pty Ltd requested that the CEO revoke TCO 0611590 which covers water cooled chillers.
Instrument
Tariff Concession Instrument No 19/2009 was made on 6 February 2009. It revokes TCO 0611590 and remakes a narrower TCO 0904091 covering water cooled chillers as the CEO is satisfied that he or she would not have made the old TCO but could have made the narrower TCO.
Consultation
Subsection 269SC(1A) of the Act provides that as soon as practicable after receiving a request for revocation of a TCO, the CEO must publish in a Gazette a notice which includes a statement that a request has been lodged and the full particulars of the TCO to which the request relates.
Commencement
Subsection 269SC(6) provides that an order revoking a TCO comes into force on the day on which the request to revoke the TCO was lodged.
Subsection 269SC(7) provides that if a narrower TCO is made in place of another TCO, that narrower TCO comes into force from the date of effect of the revocation of the other TCO.
Subsection 239SD(8) provides that subsections 269SC(6) and 269SC(7) have effect despite section 12 of the Legislative Instruments Act 2003. Section 12 prohibits the making of certain retrospective legislative instruments.
Tariff Concession Instrument No.19/2009 revoked 0611590 and made the narrower TCO No. 0904091 on 6 February.2009, with the revocation date of effect 6 February 2009
Overview
The Customs Act 1901 was amended with the introduction of the Tariff Concessions Revocation Instrument 19/2009, which was enacted to address the need for a more targeted approach to tariff concessions, specifically responding to an application from Boronia Technologies Pty Ltd to revoke an existing tariff concession order. The instrument was developed to ensure that tariff concessions are only applied when genuinely warranted and that they do not unduly favour certain industries. The enacting body, the Chief Executive Officer of Customs, was required to consider whether the tariff concession order could be narrowed or revoked in response to claims of local production of substitutable goods. The policy objective was to provide a mechanism for the revocation or narrowing of tariff concession orders, thereby maintaining a balance between fostering local production and providing necessary tariff relief for imported goods where appropriate. The instrument effectively revoked the previous concession and introduced a narrower one, reflecting the current market conditions and production capabilities within Australia.
Scope and Application
The Customs Act 1901, specifically as amended by the Tariff Concessions Revocation Instrument 19/2009, applies to any person or entity involved in the production or importation of goods subject to tariff concession orders (TCOs). This includes producers of substitutable goods in Australia and importers who rely on TCOs for preferential duty rates. The Act operates nationally across Australia, with the CEO of Customs having the authority to make and revoke TCOs. The revocation process is initiated when a producer claims to be manufacturing goods that are substitutable to those covered by an existing TCO. If the CEO determines that such production has commenced and that a narrower TCO could be justified, the existing TCO is revoked, and a new, narrower TCO is issued. The instrument comes into force on the date the revocation request was lodged, notwithstanding provisions that generally prohibit retrospective legislative instruments. The revocation and remaking of TCOs under this Act are subject to consultation requirements, including the publication of notices in a Gazette.
Key Provisions
The Tariff Concessions Revocation Instrument 19/2009, made under the Customs Act 1901, revokes Tariff Concession Order (TCO) 0611590 and replaces it with a narrower TCO 0904091. The main sections involved in this process are sections 269C, 269P, 269SB, 269SC, and 269SD (subsections 269SC(1), 269SC(4), 269SC(6), 269SC(7), and 269SC(8)). This instrument follows the procedure laid out in the Customs Act for revoking a TCO when a request is made by a party claiming to be a producer in Australia of substitutable goods. The CEO must determine whether the applicant is indeed a producer of substitutable goods and whether, if the TCO were not in force, it would not have been made in the first place.
The obligations imposed by the Customs Act on the parties involved are primarily on the CEO of Customs. Upon receiving a request for revocation, the CEO must promptly publish a notice in a Gazette, including details of the request and the TCO in question (subsection 269SC(1A)). The CEO must then decide if the request meets the criteria for revocation: that the applicant is a producer of substitutable goods and that the TCO would not have been made if the request had been made on the day the original TCO was lodged (subsection 269SC(1)). If the CEO is satisfied with these conditions and believes a narrower TCO could be made, they must revoke the existing TCO and issue a new one (subsection 269SC(4)). The new TCO will come into force from the date the original TCO was revoked (subsection 269SC(6)), and any narrower TCO will take effect from the revocation date (subsection 269SC(7)).
There are no explicit offences, penalties, or civil or criminal consequences stated in the Tariff Concessions Revocation Instrument 19/2009. However, the Customs Act, under which this instrument is made, provides for various offences related to the misuse or improper application of tariff concessions. Penalties for such offences can include fines and imprisonment, depending on the severity and intent of the breach. The specific maximum penalties would be detailed in the Customs Act, but they are not outlined in this revocation instrument.
The revocation and replacement of TCO 0611590 with TCO 0904091 is governed by the procedural and substantive requirements of the Customs Act, ensuring that the process is transparent and fair. The CEO’s role is critical in assessing the validity of the revocation request and determining the appropriate action to be taken. This process ensures that tariff concessions are only granted where justified and that Australian producers of substitutable goods have a mechanism to challenge concessions that may undermine their market position.