EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720953
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.
Wagstaff Piling Pty Ltd applied for a TCO in respect of certain automatic mixing plant on 07 December 2007.
Instrument
TCO No 0720953 was made on 29 February 2008. It declares that those certain automatic mixing plant 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. 0720953 is taken to have come into force on 07 December 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. 0720953 was enacted in 2008 under the Customs Act 1901 to provide a concessional rate of customs duty for certain goods, thereby addressing the issue of potentially higher duties on imported goods where no domestic substitute is available. This instrument was introduced to facilitate trade by reducing the cost of imported goods that are essential but not produced locally, thus encouraging the use of imported alternatives and benefiting consumers and businesses by lowering prices. The instrument was made by the Chief Executive Officer of Customs following an application from Wagstaff Piling Pty Ltd for tariff concessions on specific automatic mixing plant. The policy objective, as outlined in the Customs Act, is to ensure that tariff concessions are granted when no substitutable goods are produced in Australia, thus promoting economic efficiency and consumer welfare. The process involves a review by the CEO to ensure that the application meets the stipulated criteria, followed by the publication of a notice in the Gazette to allow for public submissions, although in this case, no objections were received.
Scope and Application
The Tariff Concession Instrument No. 0720953 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions on specific goods imported into Australia. This Act facilitates applications for Tariff Concession Orders (TCOs) to be submitted to the Chief Executive Officer of Customs, who has the authority to grant such concessions if certain criteria are met. The application process is detailed in Part XVA of the Act, with section 269F allowing for applications to be lodged. The scope of the Act is limited by section 269SJ, which specifies goods that cannot be subject to a TCO. The geographic reach of this Act is national, as it pertains to customs duties applicable throughout Australia. Notably, the Act does not affect any rights of persons other than the Commonwealth, ensuring that the imposition of the TCO does not disadvantage or impose liabilities on any individual or entity prior to the order’s effective date. The Act's provisions extend to allow for subordinate instruments to further define and specify the application of TCOs.
Key Provisions
The Tariff Concession Order (TCO) No. 0720953 under the Customs Act 1901 (section 269F) applies to specific automatic mixing plant, as declared by the Chief Executive Officer of Customs (section 269P(3)). According to this order, these particular goods now attract a zero percent duty rate, contrasting with the usual general rate of 5% applicable to such goods (section 269P(3)). This order is contingent upon the CEO's determination that no substitutable goods are produced in Australia (section 269C), and that these goods are not among those specified in section 269SJ of the Act which are ineligible for TCOs. The TCO is effective from the date the application was lodged, 07 December 2007 (subsection 269S(1)), and does not impact the rights of any person adversely, nor does it impose new liabilities (subsection 269S(1)).
Entities affected by this TCO, particularly importers of the specified automatic mixing plant, have specific obligations. Importers must ensure compliance with the TCO conditions and apply for duty refunds under paragraph 126(1)(r) of the Regulations for goods imported since the TCO's effective date (subsection 269S(1)). Additionally, any party involved in the importation or declaration of these goods must adhere to the reporting and record-keeping requirements stipulated by the Customs Act 1901 and any related regulations. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not proceed (subsection 269K(1)). However, in this instance, no submissions were received.
Failure to comply with the provisions of the TCO or the Customs Act 1901 may result in various consequences. The Act outlines both civil and criminal penalties for non-compliance, including fines and imprisonment, depending on the severity of the breach. For instance, knowingly making a false statement or providing misleading information in relation to the importation of goods can attract a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both (section 280AD of the Crimes Act 1914). Additionally, failure to declare goods or under-declaration of their value can result in penalties equivalent to the amount of duty and goods valuation tax evaded, with supplementary penalties also applicable. Importers must ensure they fully comply with the TCO and related customs regulations to avoid these penalties.