EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713585
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 dispensing machines on 28 August 2007.
Instrument
TCO No 0713585 was made on 9 November 2007. It declares that those certain dispensing 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 0%.
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. 0713585 is taken to have come into force on 28 August 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. 0713585, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods by reducing the customs duty rates for those goods. The Act, enacted by the Australian Parliament, provides a mechanism for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to offer lower duty rates on certain imported goods. This legislation was introduced to facilitate trade by reducing the duty burden on goods that are not produced domestically, thereby encouraging the import of such goods and potentially lowering consumer prices. The policy objective is to promote economic efficiency and consumer welfare by ensuring that Australian consumers have access to a wider range of competitively priced imported goods.
Scope and Application
The Tariff Concession Instrument No. 0713585 under the Customs Act 1901 applies to specific goods, in this case certain dispensing machines, and it is concerned with the reduction of customs duty rates for these goods. The Act enables the Chief Executive Officer of Customs to grant tariff concession orders if the goods in question do not have substitutable alternatives produced in Australia. The instrument applies to the person or entity that submitted the application for the tariff concession, in this instance Nordson Australia Pty Ltd, and to the specific goods identified in the application. The geographic reach of this legislation is national, as it pertains to customs duty under the Commonwealth of Australia. The Act does not apply to goods specified in section 269SJ, which are ineligible for tariff concessions. The scope of the Act can be extended or restricted through subordinate instruments, although this specific instance does not indicate any such extensions or restrictions. The tariff concession order came into effect on the date the application was lodged, which is 28 August 2007, and benefits importers by allowing them to apply for a refund of duty on goods imported since this date.
Key Provisions
The main operative sections of this legislation, particularly sections 269C and 269P(3) of the Customs Act 1901, require that a Tariff Concession Order (TCO) can only be made if the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. A substitutable good, as defined in section 269D, refers to goods produced in Australia that can be put to a use corresponding to the goods for which the TCO is sought. If these conditions are met, the CEO must make a written TCO order, as stipulated in section 269P(3), which declares the goods to which a specific tariff item applies. In this instance, TCO No. 0713585 was made on 9 November 2007, reducing the duty on certain dispensing machines from 5% to 0%.
The obligations imposed by the Act on the parties involved are primarily centred on the application process and the criteria for TCOs. An applicant, such as Nordson Australia Pty Ltd, must ensure their application meets the core criteria specified in section 269C of the Act. The CEO of Customs must then evaluate the application and determine whether it meets these criteria. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who may have an interest in the TCO application, as outlined in subsection 269K(1) of the Act. In this case, no submissions were received. Furthermore, the Act requires that the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO's registration date.
In terms of potential breaches and consequences, the Customs Act 1901 does not explicitly detail specific offences or penalties for failing to comply with the requirements of a TCO. However, general provisions within the Act imply that any failure to comply with the conditions for making a TCO could result in the TCO being deemed invalid. This could lead to the goods being subject to the higher rate of duty or other relevant penalties as stipulated under the Customs Act 1901. It is also important to note that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO itself does not impose any liabilities on any person.