EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516789
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.
Hylec Controls Pty Ltd applied for a TCO in respect of certain grinders on 12 December 2005.
Instrument
TCO No 0516789 was made on 10 March 2006. It declares that those certain grinders 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 0%.
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. 0516789 is taken to have come into force on 12 December 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 Tariff Concession Instrument No. 0516789, enacted in 2006, serves to provide tariff concessions for specific goods under the Customs Act 1901. This instrument was developed in response to an application by Hylec Controls Pty Ltd for a Tariff Concession Order (TCO) regarding certain grinders. The legislation aims to facilitate the importation of goods that are not produced in Australia, thereby ensuring that Australian consumers and businesses have access to a wider range of products at potentially lower costs. This was achieved by granting a TCO that reduced the customs duty on the specified grinders from the general rate of 5% to 0%. The instrument was enacted by the Chief Executive Officer of Customs, following the necessary criteria verification process and without any objections from the public, thereby ensuring that the tariff concessions are applied fairly and transparently.
Scope and Application
The Tariff Concession Instrument No. 0516789, under the Customs Act 1901, applies to goods specified in the Instrument and pertains to entities such as Hylec Controls Pty Ltd that seek tariff concessions for their imported goods. The geographic and jurisdictional reach of the Act is national, as it is enacted under the Commonwealth of Australia. The application of this Act is confined to the goods identified in the Instrument, and it does not affect the rights of any person other than the Commonwealth with respect to actions taken before the registration of the tariff concession. This Instrument, which came into force on 12 December 2005, grants a zero percent duty rate for certain grinders that would otherwise attract a general rate of five percent. The process for granting such concessions includes an application by interested parties, review by the Chief Executive Officer of Customs, and the publication of a notice in the Gazette inviting submissions from any person who may have reasons to object to the concession. The Instrument extends its application through subordinate instruments by detailing specific goods and their duty rates as outlined in the Customs Tariff Act 1995.
Key Provisions
The main operative sections of this legislation, particularly section 269C of the Customs Act 1901, establish the criteria that must be met for the Chief Executive Officer (CEO) of Customs to grant a Tariff Concession Order (TCO). According to section 269C, an application for a TCO will meet the core criteria if, on the date the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Substitutable goods, as defined in section 269D, are those that are produced in Australia and can be put to a use that corresponds with the use of the goods subject to the TCO application. If the CEO is satisfied that these criteria are met, they are required to make a written order, the TCO, which specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
Under this Act, the CEO has specific obligations and requirements when processing a TCO application. First, the CEO must accept a TCO application as valid, which involves ensuring it complies with the statutory requirements of the Customs Act 1901. Once accepted, the CEO must publish a notice in the Gazette (subsection 269K(1)), inviting any interested party to lodge a submission if they believe the TCO should not be made. If no submissions are received, the CEO can proceed to assess whether the application meets the core criteria outlined in section 269C. Upon satisfaction that the application meets these criteria, the CEO must make a written TCO order as specified in section 269P(3).
Failure to comply with the requirements of the Customs Act 1901 regarding the issuance of a TCO may result in civil or criminal consequences. However, this specific instrument does not detail any particular offences, penalties, or consequences for breaches. Generally, under Australian law, breaches of customs regulations can lead to civil penalties, including fines and potential imprisonment for serious or repeated breaches. For example, under section 273 of the Customs Act 1901, a person found guilty of an offence against the Act can be subject to a penalty of up to $22,200 for individuals and $111,000 for bodies corporate, in addition to potential imprisonment terms. The exact penalties would depend on the specific nature and severity of the breach, as outlined in the broader legal framework of the Customs Act 1901.