EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801096
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.
Roland DG Australia Pty Limited applied for a TCO in respect of certain scanning and or milling machines on 21 January 2008.
Instrument
TCO No 0801096 was made on 04 April 2008. It declares that those certain scanning and or milling 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. 0801096 is taken to have come into force on 21 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 Instrument No. 0801096, made under the Customs Act 1901, was enacted to address the need for reduced customs duties on certain imported goods that do not have Australian-made equivalents. This instrument was introduced to provide tariff concessions where appropriate, thereby promoting competitive advantage for Australian businesses by ensuring that imported goods do not unfairly compete with local production. The instrument was established to facilitate the application process for tariff concessions, ensuring that the Chief Executive Officer of Customs (CEO) can efficiently assess and grant concessions where the criteria are met. The CEO was mandated to make this instrument following the application by Roland DG Australia Pty Limited for tariff concessions on specific scanning and milling machines, which was lodged on 21 January 2008. The instrument was published in the Gazette, inviting any interested parties to submit objections, though none were received. The policy objective is to support Australian businesses by preventing the importation of goods that could compete with local production, thereby maintaining a fair trade environment.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 0801096, applies to entities or individuals seeking tariff concessions for specific goods, namely certain scanning and milling machines, to benefit from reduced customs duties. This Act operates on a Commonwealth level and pertains to the goods specified in the instrument, which are eligible for a tariff concession order (TCO) provided no substitutable goods are produced in Australia in the ordinary course of business. The application of this Act is narrowly tailored to the goods identified in the instrument, and it does not extend to other goods or industries unless similarly specified in future TCOs. The geographic reach of this legislation is limited to the importation of the specified goods into Australia. The Act does not apply to goods listed in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The TCO becomes effective on the date of the application, which in this case was 21 January 2008, and does not retroactively affect the rights or impose liabilities on persons other than the Commonwealth regarding actions taken before the TCO's effective date. The instrument can further extend or restrict its application through subordinate instruments, thereby allowing for more detailed regulation of specific goods and industries as needed.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). A TCO allows for a lower rate of customs duty on specified goods, provided that certain criteria are met. If a person applies for a TCO in respect of goods, and the CEO determines that the application does not pertain to goods listed in section 269SJ, the CEO must assess whether the application satisfies the core criteria outlined in section 269C. The application meets these criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The definitions for these terms are provided in sections 269D, 269E, and 269F of the Act. If the CEO is satisfied that the application meets the criteria, they must make a TCO by issuing a written order (section 269P(3)).
Under this legislation, certain obligations are placed on the parties involved. The CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made (subsection 269K(1)). This ensures transparency and provides an opportunity for stakeholders to voice their concerns. In the case of TCO No. 0801096, which was made on 4 April 2008, the CEO did not receive any submissions in response to this invitation. A TCO is considered to have come into force on the day the application for the TCO was lodged (subsection 269S(1)), meaning TCO No. 0801096 is effective from 21 January 2008. The rights of importers are positively affected by the TCO, as they can apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on any person in respect of actions taken before the date of registration.
In terms of potential breaches and the associated penalties, the Act does not explicitly detail specific offences or penalties for non-compliance with a TCO. However, breaches of other provisions within the Customs Act 1901 can result in significant civil and criminal penalties. For instance, knowingly making a false statement or representation in a document related to customs can lead to fines and imprisonment (section 236). While the TCO itself does not detail specific penalties for non-compliance, the overarching framework of the Customs Act 1901 provides a robust set of sanctions to deter violations and ensure adherence to the legislative requirements.