EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714132
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.
Food Processing Equipment Pty Ltd applied for a TCO in respect of certain forming machine on 03 September 2007.
Instrument
TCO No 0714132 was made on 09 November 2007. It declares that those certain forming machine 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. 0714132 is taken to have come into force on 03 September 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, establishes a framework for the imposition of customs duties on imported goods, and includes provisions for Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0714132, issued in 2007, addresses the problem of ensuring that Australian industries do not face undue competitive disadvantages by granting tariff concessions on specific goods. This instrument was introduced to provide relief to industries where no suitable Australian-made substitutes exist, thereby promoting fair competition and supporting domestic industries. The explanatory statement outlines that the Chief Executive Officer of Customs (CEO) is responsible for making these orders, which stipulate lower rates of customs duty on specified goods, provided they meet the core criteria set out in the Act. The policy objective is to facilitate the importation of goods that are not produced domestically, thereby aiding industries that require these imports for their operations.
Scope and Application
The Tariff Concession Instrument No. 0714132 pertains to the Customs Act 1901, which establishes a framework for Tariff Concession Orders (TCOs) under which specific goods may benefit from reduced or free customs duty. This instrument applies to any entity or person seeking to import goods that are subject to a TCO, with the primary focus on ensuring that the imported goods are not replaceable by goods produced within Australia. The application of the TCO is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced domestically, as outlined in the Act. The instrument's jurisdiction is national, with its application extending across Australia in accordance with the provisions of the Customs Act 1901. Importantly, the TCO does not affect the rights of any individual or entity, except the Commonwealth, in terms of any actions or omissions prior to the TCO's registration date, and it does not impose any new liabilities on persons, including importers who may benefit from the concessions provided. The instrument is effective from the date of the application for the TCO, in this case, 03 September 2007, and is complemented by the Customs Tariff Act 1995, which specifies the particular tariff items that the TCO applies to.
Key Provisions
The primary operative sections of this legislation revolve around the granting of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided these goods do not fall under the prohibited list specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria (section 269C), they must make a written order (section 269P(3)), specifying the goods and the applicable tariff concessions. For example, in this case, TCO No. 0714132 applies to certain forming machines, granting them a free rate of duty instead of the general 5% rate.
The obligations and requirements imposed by the Act on parties or entities it governs include the submission of a valid TCO application (section 269F) that satisfies the core criteria (section 269C). The CEO must then make a determination based on whether substitutable goods are produced in Australia in the ordinary course of business (section 269D and 269E). In this instance, Food Processing Equipment Pty Ltd applied for and received a TCO for their forming machines, as the CEO was satisfied that no substitutable goods were produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions on the application (subsection 269K(1)), although in this case, no submissions were received.
The Act also outlines potential consequences for breaches of its provisions. However, the Explanatory Statement does not specify particular offences, penalties, or civil/criminal consequences for failing to comply with the Act's requirements. The instrument itself states that the TCO does not impose any liabilities on any person, and it does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person. Importers, however, benefit from the rights conferred under paragraph 126(1)(r) of the Regulations, allowing them to apply for a refund of duty on goods imported since the TCO came into force.