EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720374
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.
APC Socotherm Pty Limited applied for a TCO in respect of certain coating machines on 30 November 2007.
Instrument
TCO No 0720374 was made on 08 February 2008. It declares that those certain coating 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. 0720374 is taken to have come into force on 30 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 Australian Parliament, addresses the need for a structured scheme to manage tariff concessions for imported goods through the creation of Tariff Concession Orders (TCOs). This legislation allows the Chief Executive Officer of Customs to apply lower rates of customs duty to certain goods, provided the application meets specific criteria such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0720374, issued on 8 February 2008, is an example of this process, where a TCO was granted for certain coating machines following an application by APC Socotherm Pty Limited on 30 November 2007. This instrument aims to reduce the duty on these goods from 5% to free, effective from the date of the application, benefiting importers by allowing them to seek duty refunds for imports since that date. The policy objective is to ensure that tariff concessions are applied fairly and transparently, with due consideration given to potential objections from interested parties.
Scope and Application
The Tariff Concession Instrument No. 0720374 under the Customs Act 1901 applies to entities such as APC Socotherm Pty Limited, which can apply for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO) to reduce the customs duty on specific goods. The Act applies to any goods that are not specified in section 269SJ, which excludes certain goods from being subject to a TCO. The CEO must determine if the application meets the core criteria, which involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business. This instrument specifically pertains to certain coating machines, which are declared as goods subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thus lowering the duty from 5% to free. The TCO's application extends across the Commonwealth of Australia and is effective from the date the application was lodged, in this case, 30 November 2007. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities, except the Commonwealth, for actions taken before the order's registration. The CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although in this instance, no submissions were received.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0720374, as outlined in the Customs Act 1901, involve the creation of a Tariff Concession Order (TCO) for certain coating machines. According to section 269F (1), any person can apply to the Chief Executive Officer of Customs (CEO) for a TCO regarding goods. If the CEO determines that the application does not pertain to goods listed in section 269SJ, which are ineligible for TCO, they must then assess whether the application meets the core criteria specified in section 269C. This entails confirming that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D, 269E, and 269F.
Once the CEO is satisfied that the application meets these criteria, they are required by section 269P(3) to issue a written order (a TCO) specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For the specific case of APC Socotherm Pty Limited's application regarding certain coating machines, Instrument TCO No. 0720374, dated 08 February 2008, was made effective from 30 November 2007. This TCO applies item 50 of Schedule 4 to the Tariff, resulting in the duty rate for these machines being set at free, down from the general rate of 5%.
Entities and individuals governed by this legislation must adhere to the outlined process for applying for a TCO and must ensure that their applications meet the core criteria, including the absence of substitutable goods produced in Australia. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette after accepting a TCO application as valid, inviting any interested parties to submit objections. In this instance, no submissions were received.
Failure to comply with the requirements of the Customs Act 1901 or the specific terms of a TCO could lead to civil or criminal consequences. However, the explanatory statement does not provide explicit details on penalties or specific consequences for non-compliance. The general legal framework of the Customs Act 1901 would apply, which could include fines, imprisonment, or other civil remedies for breaches of customs regulations.