EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711154
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.
TPI Enterprises Ltd applied for a TCO in respect of certain filter presses on 20 December 2007.
Instrument
TCO No 0711154 was made on 7 March 2008. It declares that those certain filter presses 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. 0711154 is taken to have come into force on 20 December 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, was amended to introduce the scheme for Tariff Concession Orders (TCOs) through Part XVA. This legislative framework was introduced to address the gap in tariff relief for goods not produced domestically, thereby promoting fair trade practices and supporting Australian industries by preventing unfair competition from imported goods. The Customs Act 1901 allows the Chief Executive Officer of Customs to make TCOs, granting tariff concessions for specified goods when no substitutable goods are produced in Australia. This aims to protect local industries by reducing the tariff burden on certain imported goods, thereby fostering economic growth and ensuring competitive market conditions. The policy objective is to support Australian businesses by providing a mechanism for reducing customs duties on imported goods under specific conditions, as articulated within the Act.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply reduced rates of customs duty on certain goods. This mechanism is available to any person who applies to the CEO for a TCO in respect of goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The Act ensures that a TCO is granted only if no substitutable goods are produced in Australia on the day the application is lodged, as outlined in sections 269C and 269S of the Act. The instrument in question, TCO No. 0711154, was made on 7 March 2008 for certain filter presses, effective from 20 December 2007, reducing the duty rate from 5% to free. The process requires the CEO to publish a notice in the Gazette inviting submissions, though in this case, no submissions were received. The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities, instead allowing importers to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0711154, revolve around the establishment of a Tariff Concession Order (TCO) under the Customs Act 1901 (section 269F). This order provides for a lower rate of customs duty on specified goods. Under section 269C, a TCO application is considered to meet the core criteria if no substitutable goods were produced in Australia at the time of application. The instrument itself, section 269P(3), mandates that the Chief Executive Officer of Customs (CEO) must make a written order declaring that the goods subject to the TCO application are those to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For instance, in this case, the TCO No. 0711154 specifies that certain filter presses are subject to item 50 of Schedule 4, resulting in a free rate of duty for these goods.
The obligations imposed by this Act on the parties or entities it governs primarily concern the CEO’s responsibilities in processing and deciding on TCO applications. The CEO must ensure that the application meets the core criteria as outlined in section 269C and must make a written order if satisfied. Furthermore, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO is also responsible for ensuring that the rights of individuals, other than the Commonwealth, are not adversely affected by the TCO, as per section 269S(1). Additionally, importers of the goods in question have the right to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.
The legislation also outlines consequences for non-compliance. While the explanatory statement does not explicitly detail offences, penalties, or civil/criminal consequences, the underlying Customs Act 1901 and associated regulations would typically impose penalties for breaches of customs laws, including fines and potential criminal charges. The specific penalties for breaches related to TCOs would generally be consistent with those outlined in the broader customs legislation, which can include substantial fines and imprisonment for serious or repeated offences. However, the explanatory statement does not provide maximum penalties within its text.