EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719750
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.
Almol Equipment Pty Ltd applied for a TCO in respect of certain centrifuge machines on 20 November 2007.
Instrument
TCO No 0719750 was made on 29 February 2008. It declares that those certain centrifuge 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 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. 0719750 is taken to have come into force on 20 November 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 Commonwealth Parliament, was amended to include Tariff Concession Orders (TCOs) through Part XVA to address the need for providing tariff relief for certain imported goods where Australian production of substitutable goods is non-existent or insufficient. This was designed to encourage the importation of specific goods, thereby supporting industries where local production does not meet demand or where the goods are not produced domestically at all. The Act allows the Chief Executive Officer of Customs to make TCOs upon application if certain conditions are met, specifically that no substitutable goods are produced in Australia in the ordinary course of business. Tariff Concession Instrument No. 0719750 was enacted following an application by Almol Equipment Pty Ltd for tariff concessions on certain centrifuge machines, reflecting the policy objective of reducing the duty on these specific imported goods to foster economic efficiency and support industries reliant on imported components.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity that applies for a TCO in respect of goods, provided that such goods are not specified in section 269SJ of the Act, which lists those that cannot be subject to a TCO. The core criteria for a TCO, as outlined in sections 269C, 269D, 269E, and 269F, must be satisfied, particularly the requirement that no substitutable goods are produced in Australia at the time of application. Once the CEO is satisfied with the application, a TCO is issued, effectively reducing the customs duty on the specified goods. This order applies nationally across Australia, and the TCO's commencement date is the day on which the application is lodged. The TCO does not affect the rights of any person adversely or impose any liabilities unless in respect of actions taken post the registration date of the TCO. It is worth noting that the TCO does not extend or restrict its application through subordinate instruments but rather operates within the confines of the primary Act.
Key Provisions
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. These orders allow for a lower rate of customs duty on specified goods, as outlined in section 269F. A person can apply for a TCO if the goods in question are not listed in section 269SJ, which identifies goods ineligible for a TCO. The CEO's decision to grant a TCO hinges on whether the application meets the core criteria, specifically, whether no substitutable goods were produced in Australia on the date the application was lodged (section 269C). The CEO must make a written order, a TCO, if satisfied that the application meets these criteria (subsection 269P(3)).
The obligations of the parties involved in the TCO process are clear and specific. The applicant must ensure that their goods do not fall under the ineligible list in section 269SJ and must demonstrate that no substitutable goods were produced in Australia at the time of application. The CEO, on the other hand, is obligated to review the application, assess whether it meets the core criteria, and if so, to issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, although this step did not yield any submissions in the case of TCO No. 0719750. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them regarding actions taken before the TCO's effective date.
Breaching the conditions set forth in the Customs Act 1901 can lead to civil or criminal consequences, depending on the nature of the violation. While the explanatory statement does not specify the exact penalties, breaches of customs regulations generally result in fines and, in severe cases, imprisonment. The penalties can vary significantly, but they often include financial penalties commensurate with the severity of the offence. For instance, providing false information in an application could lead to substantial fines or even imprisonment. The specifics of these penalties are detailed in other sections of the Act and related regulations.