EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712311
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.
Industrial Ecosystems Pty Ltd applied for a TCO in respect of certain spheronizers on 31 July 2007.
Instrument
TCO No 0712311 was made on 08 October 2007. It declares that those certain spheronizers 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. 0712311 is taken to have come into force on 31 July 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 was enacted to establish a comprehensive framework for the regulation of customs and excise duties in Australia. This legislation provides the authority for the establishment of Tariff Concession Orders (TCOs) under Part XVA, which aim to provide tariff concessions on specific goods, thereby encouraging the importation and use of these goods. The Customs Act 1901 was introduced by the Australian Parliament to streamline and regulate the customs and excise duties, aiming to provide a structured approach to tariff concessions for certain goods. The Tariff Concession Instrument No. 0712311, issued on 8 October 2007, is an example of such regulation in action, where certain spheronizers were granted a tariff concession, reducing the duty rate from 5% to free. This instrument was made under the authority granted by section 269F of the Customs Act 1901, and the policy objective is to ensure that the concession does not disadvantage any person and imposes no liabilities on anyone except the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0712311 under the Customs Act 1901 applies to the specific goods known as certain spheronizers, which have been granted a tariff concession order by the Chief Executive Officer of Customs. This legislation is designed to benefit importers of these goods by reducing the rate of customs duty from the general rate of 5% to free, provided that the application for the tariff concession met the core criteria, which in this case was the absence of substitutable goods being produced in Australia. The geographic scope of this legislation is national, applying across Australia and governed by Commonwealth law. Any person or entity importing these spheronizers will be subject to the reduced customs duty as per this Tariff Concession Order. Exclusions to this Act are those goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a tariff concession. The application of this Act may be further detailed or modified through subordinate instruments, though this specific Instrument does not extend or restrict its application beyond what is outlined.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0712311, under the Customs Act 1901, focus on the process and criteria for granting Tariff Concession Orders (TCOs). Section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a TCO for certain goods. The CEO must assess whether the application meets the core criteria specified in sections 269C and 269SJ of the Act. For example, the application must not be for goods specified in section 269SJ, which are ineligible for TCOs. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) declaring the goods subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995 (subsection 269P(3)).
The obligations imposed by this Act on the parties involved are primarily centred around the application and assessment process for TCOs. The CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). In this case, no submissions were received, allowing the CEO to proceed with the TCO. The CEO is also required to ensure that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C).
Breaches of the provisions outlined in the Act may result in various consequences. While the explanatory statement does not specify offences or penalties for non-compliance with the TCO process, the Customs Act 1901 generally includes provisions for offences and penalties for non-compliance with customs regulations. These can include fines, imprisonment, or both, depending on the nature and severity of the breach. For example, under the Customs Act, penalties can include fines of up to $22,000 for individuals and significantly higher amounts for corporations, along with potential imprisonment terms. It is important to note that the specific penalties and consequences for breaches related to TCOs would be determined by the relevant provisions of the Customs Act and any applicable regulations.