EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713587
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 heads on 28 August 2007.
Instrument
TCO No 0713587 was made on 9 November 2007. It declares that those certain dispensing heads 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. 0713587 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 Customs Act 1901 was enacted to facilitate and regulate the movement of goods into and out of Australia, ensuring efficient customs processes and appropriate revenue collection. The Tariff Concession Instrument No. 0713587, made in 2007 under the authority of the Customs Act, addresses the gap in tariff rates for specific imported goods by establishing a scheme for Tariff Concession Orders (TCOs). This instrument allows for a reduction in customs duty for certain goods, as determined by the Chief Executive Officer of Customs, provided that no substitutable goods are produced in Australia in the ordinary course of business. The policy objective is to ensure that Australian industries are not disadvantaged by the availability of cheaper imported goods, thereby promoting fair trade practices and economic stability. The instrument was introduced by the relevant legislature, with the aim of providing a streamlined process for applying for tariff concessions, ensuring that affected parties have the opportunity to be heard before a concession is granted.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the process by which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply to goods that attract a lower rate of customs duty and are granted if certain criteria are met, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The Act allows for applications from individuals or entities to the CEO for a TCO, subject to the exclusion of specific goods outlined in section 269SJ. Once an application is accepted and the core criteria are satisfied, the CEO must issue a written order specifying the goods and the reduced duty rate, as specified in the Customs Tariff Act 1995. This legislative framework extends across the Commonwealth of Australia, impacting industries that rely on imported goods by providing a potential reduction in customs duties. The scope of the TCO is determined by the specific goods covered in the order, and it does not retroactively affect any rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901, as relevant to this Tariff Concession Instrument, include sections 269C, 269B, 269D, 269E, 269F, 269P, 269SJ, and 269K. These sections outline the process for applying for and granting Tariff Concession Orders (TCOs), specifying the criteria for TCO eligibility and the procedure for publishing notices in the Gazette to allow for public submissions (section 269K). Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods are produced in Australia on the day the application is lodged, while section 269SJ details the types of goods that cannot be subject to a TCO. If the Chief Executive Officer of Customs (CEO) is satisfied that a TCO application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P).
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. An applicant, such as Nordson Australia Pty Ltd in this case, must submit an application to the CEO for a TCO, ensuring that the application meets the core criteria specified in section 269C. The CEO, on receiving a valid application, must decide whether it meets the criteria and, if satisfied, must make a written TCO (section 269P). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions opposing the TCO (section 269K). Once the TCO is made, the CEO is responsible for ensuring that it does not disadvantage any person other than the Commonwealth and does not impose any liabilities on anyone in respect of actions taken before the TCO’s effective date.
The Customs Act 1901 includes provisions for offences, penalties, and consequences for breach of its terms. Although the Act does not specify maximum penalties for breaches related to TCOs, general penalties for non-compliance with the Customs Act can include fines and imprisonment. For example, under section 236, any person who knowingly or recklessly makes a false or misleading statement in connection with an import or export declaration can be subject to penalties. The penalties can be severe, with fines of up to $22,200 and/or imprisonment for up to two years for individuals, and higher penalties for corporations. Furthermore, failure to comply with a TCO or other customs requirements can lead to financial penalties, seizure of goods, and potential legal actions to recover duties and penalties.