EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512268
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.
HTL Perma Australia Pty Ltd applied for a TCO in respect of certain programmed grease lubricator actuators on 21 September 2005.
Instrument
TCO No 0512268 was made on 12 December 2005. It declares that those certain programmed grease lubricator actuators 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.0512268 is taken to have come into force on 21 September 2005.
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 was enacted by the Australian Parliament to provide for the collection of customs duties and the regulation of customs and excise. The Act was introduced to address the need for a systematic approach to managing and regulating the import and export of goods in Australia. The Tariff Concession Instrument No. 0512268, introduced on 12 December 2005, is part of this legislative framework, establishing a process for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). These orders allow for a lower rate of customs duty on certain goods, provided they meet specific criteria such as the absence of substitutable goods produced in Australia. The policy objective of this instrument is to facilitate trade by reducing the duty burden on certain imported goods, thereby potentially enhancing the competitiveness of Australian businesses and consumers.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0512268, pertains to the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to entities and individuals who seek lower rates of customs duty on specific goods through the application process. The scope includes any goods that are not specified in section 269SJ of the Act, which outlines those goods ineligible for TCOs. This legislation has a national reach across Australia, as it is a Commonwealth Act, thereby affecting customs duties on a national level. The Act does not impose any new liabilities on individuals or entities and does not disadvantage anyone by affecting rights established prior to the registration of a TCO. The application of the Act can be extended through subordinate instruments, which may further detail the specific conditions and processes involved in TCO applications. The Tariff Concession Instrument No. 0512268, as an example, was made to provide a free rate of duty on certain programmed grease lubricator actuators, contingent upon the CEO's satisfaction that no substitutable goods were produced in Australia on the application date.
Key Provisions
The Tariff Concession Instrument No. 0512268, made under the Customs Act 1901, establishes a tariff concession order (TCO) for certain programmed grease lubricator actuators, reducing the customs duty on these goods from 5% to free (section 269P(3)). This concession applies because no substitutable goods were produced in Australia on the date of the application (section 269C). The TCO came into effect on the date the application was lodged, 21 September 2005, and does not affect rights or impose liabilities prior to this date (subsection 269S(1)). The Chief Executive Officer of Customs (CEO) must decide whether the TCO application meets the core criteria, such as the absence of substitutable Australian-made goods (section 269C), and if satisfied, must issue a written TCO (subsection 269P(3)).
Entities applying for a TCO must ensure their application is valid and meets the core criteria set out in the Customs Act 1901. They must demonstrate that no substitutable goods were produced in Australia and that the goods in question are eligible for a tariff concession (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for this TCO (subsection 269K(1)). Importers of the affected goods can apply for a refund of duties paid since the TCO came into effect (paragraph 126(1)(r) of the Regulations).
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations could result in legal consequences. While specific offences and penalties are not detailed in the explanatory statement, general provisions under the Act could lead to fines or imprisonment for breaches such as fraudulent applications or incorrect use of tariff concessions. The maximum penalties for such offences can vary but often include substantial fines and potential imprisonment, depending on the severity of the breach. It is essential for entities to adhere strictly to the requirements to avoid these consequences.