EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800534
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.
Australian Urethane & Styrene Pty Ltd applied for a TCO in respect of certain expander machines on 9 January 2008.
Instrument
TCO No 0800534 was made on 25 March 2008. It declares that those certain expander 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. 0800534 is taken to have come into force on 9 January 2008.
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, establishes a framework for the administration of customs and excise duties, including the ability to create Tariff Concession Orders (TCOs) via the Chief Executive Officer of Customs. The problem it addresses is the facilitation of reduced customs duty rates for specific goods, provided that no equivalent goods are produced domestically in the ordinary course of business. This scheme aims to enhance the competitiveness of Australian industries by allowing the importation of certain goods at a lower tariff rate, thereby encouraging economic activity and market diversity. Tariff Concession Instrument No. 0800534, issued on 25 March 2008, exemplifies this process by granting a tariff concession for certain expander machines, reducing their duty from 5% to free, effective from the date the application was lodged, 9 January 2008. This legislative instrument ensures that the rights of importers are positively affected, allowing them to apply for refunds on duties paid before the concession was effective.
Scope and Application
The Tariff Concession Instrument No. 0800534 applies to the concession of customs duty rates for specific goods as outlined in the Customs Act 1901, particularly under Part XVA, which pertains to Tariff Concession Orders (TCOs). This Act applies to any individual or entity that has applied for and received a TCO from the Chief Executive Officer of Customs, enabling them to import the specified goods at a lower rate of duty. The scope of the Act extends to the specified goods, namely certain expander machines, and the industries that require these goods. Geographically, the Act operates within the jurisdiction of the Commonwealth of Australia, with its application potentially affecting all states and territories under federal customs regulation. Exclusions are noted in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act's application can be further defined through subordinate instruments, which may provide additional criteria or specific details about the goods and industries involved.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0800534 under the Customs Act 1901 (section 269F) allow the Chief Executive Officer (CEO) of Customs to make a Tariff Concession Order (TCO) for certain goods. If the CEO is satisfied that the application for a TCO meets the core criteria set out in section 269C, and the goods are not specified in section 269SJ, the CEO must make a written order declaring the goods to which the concession applies. This instrument, specifically TCO No. 0800534, declares that certain expander machines are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a tariff rate of free instead of the general 5% rate.
The Act imposes several obligations and requirements on the parties it governs. For instance, section 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed. If no submissions are received, the CEO must proceed with the order. Additionally, section 269S(1) specifies that the TCO comes into force on the day the application was lodged, in this case, 9 January 2008. The Act also ensures that the TCO does not affect the rights of any person other than the Commonwealth in a manner that would disadvantage them or impose liabilities for actions taken before the registration date.
In terms of consequences for breach, the Act does not explicitly detail offences, penalties, or civil/criminal consequences for failing to comply with the provisions of a TCO. However, any non-compliance with the broader Customs Act 1901 may lead to penalties as stipulated in other sections of the Act. For example, non-compliance with customs regulations can result in civil penalties, including fines and imprisonment, depending on the severity and intent of the breach. The exact penalties for such breaches would be governed by the specific sections of the Customs Act 1901 that are contravened.