EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709032
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.
Sony DADC Australia Pty Limited applied for a TCO in respect of certain labelling machines on 14 June 2007.
Instrument
TCO No 0709032 was made on 24 August 2007. It declares that those certain labelling 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. 0709032 is taken to have come into force on 14 June 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 Tariff Concession Instrument No. 0709032 was enacted in 2007 under the Customs Act 1901 to address the need for a streamlined process for granting tariff concessions on specific imported goods. The Customs Act 1901, overseen by the Parliament of Australia, provides for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce customs duty on certain imported goods, provided specific criteria are met. This instrument was introduced to facilitate the importation of labelling machines by Sony DADC Australia Pty Limited by granting them tariff concessions on these goods, thereby reducing the customs duty from the general rate of 5% to free. The policy objective is to support industries by reducing the cost of importing essential machinery and materials, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0709032, made under the Customs Act 1901, applies to specific labelling machines for which Sony DADC Australia Pty Limited applied for a tariff concession order (TCO) on 14 June 2007. The Act authorises the Chief Executive Officer of Customs to grant TCOs that lower the customs duty on specified goods if certain criteria are met, including that no substitutable goods are produced in Australia in the ordinary course of business. The TCO was issued on 24 August 2007, effective from the date of the application, and it exempts the specified labelling machines from the general duty rate of 5%, applying a duty rate of free instead. The geographic scope of the Act is national, as it is a Commonwealth Act, and it applies to entities such as Sony DADC Australia Pty Limited that are involved in the importation of the specified goods. The Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth. The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force. The CEO of Customs did not receive any submissions in response to the Gazette notice published as part of the consultation process required by the Act.
Key Provisions
The Tariff Concession Instrument No. 0709032 pertains to the Customs Act 1901, specifically addressing the creation of Tariff Concession Orders (TCOs) under section 269F. A TCO allows for a lower rate of customs duty on certain goods. The primary operative sections of the Act include section 269C, which requires that a TCO application meets the core criteria if no substitutable goods are produced in Australia on the day the application is lodged. The definition of "substitutable goods" is found in section 269D and includes goods produced in Australia that can be put to a similar use as the goods the application is for. Section 269P(3) mandates that if the CEO is satisfied with the application, a TCO must be issued.
The Act imposes several obligations on the parties involved. The CEO is required to make a decision on the TCO application based on the criteria set out in section 269C. If the application meets these criteria, the CEO must issue a written TCO (section 269P(3)). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In the case of TCO No. 0709032, the CEO did not receive any submissions. The TCO is effective from the date the application was lodged, as per section 269S(1).
Breaching the requirements of the Act or failing to comply with a TCO can lead to various consequences. While the explanatory statement does not detail specific offences or penalties related to the TCO process, the Customs Act 1901 generally provides for both civil and criminal penalties for non-compliance with its provisions. These may include fines, imprisonment, or other sanctions as prescribed by the Act. The exact penalties depend on the nature and severity of the breach, as outlined in the broader legislative framework.