EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512938
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.
Sun Metals Corporation Pty Ltd applied for a TCO in respect of certain centrifugal pumps on 27 September 2005.
Instrument
TCO No 0512938 was made on 23 December 2005. It declares that those certain centrifugal pumps 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. 0512938 is taken to have come into force on 27 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 to facilitate and regulate the customs and border control processes in Australia, including the imposition of customs duties on imported goods. One of the mechanisms provided by the Act for reducing customs duties on certain imported goods is the Tariff Concession Order (TCO). In response to an application from Sun Metals Corporation Pty Ltd, Tariff Concession Instrument No. 0512938 was issued by the Chief Executive Officer of Customs on 23 December 2005, pursuant to section 269F of the Act. This instrument grants a tariff concession on certain centrifugal pumps, reducing the duty from 5% to free, effective from 27 September 2005, the date the application was lodged. The policy objective of this concession is to lower the cost of importing specific goods that are not produced in Australia, thereby supporting the competitiveness of businesses that rely on these imports. The instrument was issued without any submissions opposing the concession, indicating no public opposition to the tariff reduction for these goods.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) which apply lower rates of customs duty to specific goods. This Act applies to any individual or entity that seeks a tariff concession for goods imported into Australia, provided that such goods are not listed under section 269SJ of the Act as ineligible. The application process involves demonstrating that no substitutable goods are produced in Australia at the time of application, as defined under sections 269D, 269E, and 269F of the Act. The scope of this legislation is national, as it operates under the authority of the Commonwealth and affects all importers within Australia. Subordinate instruments may further refine the application of the Act, although the primary legislation itself does not explicitly mention any such extensions. The commencement date of a TCO is considered to be the date of the application, ensuring that rights and liabilities are preserved for actions taken prior to the order’s effective date. This Act notably benefits importers by allowing them to apply for duty refunds on goods imported after the TCO comes into force, without imposing new liabilities on them or other persons.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0512938, which are relevant under the Customs Act 1901, include sections 269C, 269F, 269P, and 269SJ (section 269C). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) for certain goods. Section 269C stipulates that the application for a TCO meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a TCO under section 269P. This instrument was specifically made for certain centrifugal pumps, declaring them to be subject to a zero rate of customs duty.
The obligations imposed by this Act on the parties include the requirement for the CEO to decide whether an application for a TCO meets the core criteria and to make a written order if it does. Additionally, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit their views on the application. In this instance, the CEO did not receive any submissions in response to the notice published for TCO No. 0512938. The TCO also ensures that it does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken before the date of registration.
Regarding penalties and consequences, the Act does not explicitly state penalties for breaches related to the TCO process. However, any failure to comply with the terms and conditions of the TCO could potentially result in civil or criminal consequences under the broader Customs Act 1901. Importers of goods subject to a TCO are entitled to apply for a refund of duty on goods imported since the TCO came into force, as stipulated under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, ensuring that it does not disadvantage anyone or retroactively affect any past transactions.