EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613893
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.
Nordson Australia Pty Ltd applied for a TCO in respect of certain powder sprayers on 18 August 2006.
Instrument
TCO No 0613893 was made on 03 November 2006. It declares that those certain powder sprayers 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. 0613893 is taken to have come into force on 18 August 2006.
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 Australian Parliament, provides the framework for the administration of customs and excise in Australia. Specifically, Part XVA of this Act sets up a scheme where Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. The problem this legislation addresses is the need for flexibility in customs duty rates to support Australian industry and trade, particularly for goods where no suitable domestic alternatives exist. The explanatory statement for Tariff Concession Instrument No. 0613893, made under the Customs Act, highlights that the CEO can issue a TCO if satisfied that no substitutable goods are produced in Australia, thus ensuring the application of a tariff concession. The policy objective is to facilitate the importation of goods by reducing or eliminating customs duty where appropriate, thereby supporting Australian businesses and consumers.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, and specifically addresses the process through which tariff concession orders (TCOs) can be granted to reduce the customs duty on certain imported goods. The Act allows the Chief Executive Officer of Customs to make TCOs under section 269F, provided the application meets the core criteria outlined in section 269C, which is contingent on the non-production of substitutable goods in Australia. The instrument applies to all goods that meet the criteria set forth in the Customs Act and Customs Tariff Act 1995, without distinction based on the type of entity or industry, as long as the application is not in respect of goods specified in section 269SJ. The scope of the legislation is national, covering all jurisdictions within Australia. Notably, the Act does not disadvantage any person other than the Commonwealth by imposing liabilities or affecting rights prior to the registration of a TCO. Subordinate instruments may further define or extend the application of this legislation, although the primary focus remains on facilitating the reduction of customs duties for specified imported goods through the issuance of TCOs.
Key Provisions
The main operative sections of the Customs Act 1901 that are relevant to this Tariff Concession Order (TCO) include section 269C, which outlines the core criteria for approving a TCO application. According to this section, a TCO application meets the core criteria if, on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively (ss 269D, 269E, 269F). If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these core criteria, they must make a written order declaring the goods subject to the TCO (s 269P(3)).
The obligations imposed by the Customs Act 1901 on parties subject to this legislation include the requirement for applicants to ensure their TCO applications meet the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the date of application. The CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (s 269K(1)). If no submissions are received, the CEO must then decide whether to make the TCO. Importers of the goods subject to the TCO may apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (Reg 126(1)(r)).
Breaching the provisions of the Customs Act 1901, including making false statements in an application for a TCO, may result in criminal and civil penalties. The maximum penalty for a criminal offence under the Customs Act 1901 includes fines and imprisonment, with specific penalties outlined in the Act. Civil penalties may also apply for non-compliance, with the exact penalties depending on the nature and extent of the breach. The Act also includes provisions for the recovery of duties and penalties, which can result in financial liabilities for the parties involved if they are found to have breached the Act.