EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800795
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.
Nepean Rubber Mouldings Pty Ltd applied for a TCO in respect of certain compression rubber moulding machines on 14 January 2008.
Instrument
TCO No 0800795 was made on 28 March 2008. It declares that those certain compression rubber moulding 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. 0800795 is taken to have come into force on 14 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 Tariff Concession Order No. 0800795, introduced under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods that are not produced domestically and therefore benefit from lower customs duties. Enacted by the Parliament of Australia, the policy objective of this legislation is to support industries that rely on imported goods by reducing their import costs, thereby making these goods more competitive in the Australian market. This order was specifically applied to certain compression rubber moulding machines, which Nepean Rubber Mouldings Pty Ltd sought to import. The order declares that these machines are subject to a zero percent duty rate, which is a concession from the general rate of 5 percent applicable to such goods. The process involved ensuring that no substitutable goods were produced in Australia, and after the Chief Executive Officer of Customs confirmed this, the order was published and took effect from the date of application, 14 January 2008. This measure aims to positively impact importers by allowing them to claim refunds on duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0800795, made under the Customs Act 1901, applies specifically to certain compression rubber moulding machines that were the subject of an application by Nepean Rubber Mouldings Pty Ltd on 14 January 2008. This Instrument, which came into force on the same date, is an outcome of the scheme outlined in Part XVA of the Customs Act 1901, whereby the Chief Executive Officer of Customs may grant Tariff Concession Orders (TCOs) to lower the customs duty on particular goods. The application for a TCO was made in accordance with the criteria stipulated in the Act, notably the absence of substitutable goods being produced in Australia at the time of the application. Upon determining that the application met the necessary criteria, the CEO issued TCO No. 0800795, which declares that the specified machines are subject to the terms of item 50 of Schedule 4 of the Customs Tariff Act 1995, effectively rendering the duty on these machines free, down from the general rate of 5%. This Instrument does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0800795, as outlined in the explanatory statement, are primarily drawn from the Customs Act 1901 and the Customs Tariff Act 1995. Specifically, section 269F (1) of the Customs Act allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C determines the core criteria that an application must meet, including the absence of substitutable goods produced in Australia on the day the application is lodged, as defined in sections 269D, 269E, and 269F of the Act. If the CEO is satisfied that these criteria are met, a TCO is issued under section 269P(3), which specifies the prescribed item of Schedule 4 to the Tariff that applies to the goods. This particular instrument, TCO No. 0800795, applies to certain compression rubber moulding machines, which now have a duty rate of free, as opposed to the general rate of 5%.
The Act imposes certain obligations and requirements on both the applicant and the CEO. Nepean Rubber Mouldings Pty Ltd, the applicant, must submit an application under section 269F(1) and ensure that the goods specified meet the core criteria outlined in section 269C. The CEO, upon receiving the application, must verify that it is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. If the application meets the core criteria, the CEO is mandated to make a written TCO under section 269P(3). Additionally, the CEO is required by subsection 269K(1) to publish a notice in the Gazette inviting any interested party to lodge a submission if they believe there are reasons why the TCO should not be made. In this case, no submissions were received.
The Customs Act also outlines specific consequences for breaches related to the TCO process. Although the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breach, it is clear that any misuse or improper application of a TCO could lead to legal repercussions. The general penalties for breaches of the Customs Act can include fines and imprisonment, depending on the nature and severity of the offence. The specifics of these penalties would be detailed in other sections of the Act and would be applied in accordance with the general principles of criminal law in Australia.
In summary, the Tariff Concession Instrument No. 0800795 establishes a process for applying for and granting tariff concessions on specific goods, provided they meet the criteria set out in the Customs Act 1901. It outlines the obligations of both the applicant and the CEO, and while it does not detail specific penalties for breaches, such consequences would be derived from the broader legal framework provided by the Customs Act.