EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705135
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.
Carba-Tec Pty Ltd applied for a TCO in respect of certain sanding machines on 04 April 2007.
Instrument
TCO No 0705135 was made on 22 June 2007. It declares that those certain sanding machines 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. 0705135 is taken to have come into force on 04 April 2007.
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 a framework for the imposition of customs duties on imported goods. One of the mechanisms under this Act is the establishment of Tariff Concession Orders (TCOs), which allow for the application of lower customs duty rates on specific goods. The problem this legislation addresses is the potential economic disadvantage faced by industries if certain imported goods are subject to high tariff rates, thereby protecting Australian industries from undue competition. The policy objective is to ensure fair trade practices by allowing the reduction of customs duty on goods where appropriate. In this context, the Tariff Concession Instrument No. 0705135 was introduced to provide tariff concessions for certain sanding machines, following an application by Carba-Tec Pty Ltd. The instrument was enacted to ensure that the importation of these machines would not be hindered by prohibitive customs duty rates, thereby benefiting importers who could now claim refunds on duties paid prior to the TCO’s effective date.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 0705135, applies to entities seeking tariff concessions for specific goods imported into Australia. This legislative instrument is particularly relevant to those involved in the importation of goods, including businesses like Carba-Tec Pty Ltd, which applied for a tariff concession order (TCO) for certain sanding machines. The Act allows the Chief Executive Officer of Customs (CEO) to issue TCOs that lower the rate of customs duty on goods if certain criteria are met. This includes ensuring that no substitutable goods are produced in Australia at the time the TCO application is lodged. The geographic scope of the Act is national, applying across all jurisdictions within Australia, as it is a Commonwealth Act. The Act does not extend or restrict its application through subordinate instruments beyond the provisions specified within the Customs Act and the Customs Tariff Act 1995. It is important to note that the Act does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO is registered, ensuring that the rights of importers are positively affected by the concession.
Key Provisions
The Customs Act 1901 (the Act) is the primary piece of legislation under which Tariff Concession Orders (TCOs) can be made. Section 269F of the Act allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. The CEO has the authority to make a TCO under section 269P of the Act if certain conditions are met. Specifically, section 269C stipulates that an application for a TCO meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B further defines "goods produced in Australia", "ordinary course of business", and "substitutable goods" in the context of a TCO application. If the CEO is satisfied that the application meets the core criteria, they must issue a written order (a TCO) under subsection 269P(3) of the Act, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must submit a valid application to the CEO for a TCO, ensuring that the goods in question meet the core criteria outlined in the Act. Once an application is accepted as valid, the CEO must publish a notice in the Gazette under subsection 269K(1) of the Act, inviting any interested parties to submit any objections or reasons why the TCO should not be made. The CEO must then consider any submissions received before making a decision on the TCO application. The CEO's obligation is to ensure that the TCO is only issued if the application meets the core criteria and no objections are validly raised.
In terms of consequences for breach, the Act does not explicitly outline offences, penalties, or specific civil or criminal consequences for failing to comply with the requirements of a TCO. However, any breach of the Act's provisions or the Tariff would likely be subject to the general enforcement mechanisms provided by the Customs Act 1901, which could include fines, penalties, or other legal actions. The exact penalties would depend on the nature and severity of the breach, as well as the specific provisions of the Customs Act 1901 that are contravened. The Tariff itself does not stipulate specific penalties but would inform the duty rates applicable to goods subject to a TCO.