EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802241
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.
Brolton Group Pty Ltd applied for a TCO in respect of certain dry mix plant on 7 February 2008.
Instrument
TCO No 0802241 was made on 11 April 2008. It declares that those certain dry mix 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. 0802241 is taken to have come into force on 7 February 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 Australian Parliament, was supplemented with the introduction of Tariff Concession Orders (TCOs) to provide a mechanism for reducing customs duty on specific goods under certain conditions. This mechanism allows the Chief Executive Officer of Customs to grant concessions that lower the duty on goods that meet specified criteria, primarily when there are no substitutable goods produced in Australia. The Tariff Concession Instrument No. 0802241, made in 2008, is an example of this process, where the CEO granted a concession for certain dry mix plant, setting the duty rate at zero instead of the general rate of 5%. This legislation aims to support industries by making imported goods more competitively priced, thereby encouraging trade and economic growth without disadvantaging existing rights or imposing new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0802241 under the Customs Act 1901 applies to the concession of customs duty on certain dry mix plant imported into Australia. The Act permits the Chief Executive Officer of Customs to make Tariff Concession Orders for goods that are not substitutable by goods produced in Australia. In this instance, the CEO granted a concession to Brolton Group Pty Ltd, reducing the duty on the specified dry mix plant from 5% to free. This concession is applicable to the importation of these goods from the date of the application, 7 February 2008, and is effective regardless of the date of the instrument's registration, 11 April 2008. The instrument does not affect any pre-existing rights or liabilities of parties other than the Commonwealth, ensuring that the rights of importers are beneficially affected, particularly through the potential for duty refunds on goods imported since the concession's effective date. The CEO's decision followed a publication in the Gazette inviting submissions, none of which were received.
Key Provisions
The Tariff Concession Instrument No. 0802241 (the Instrument) is an order made under section 269F of the Customs Act 1901 (the Act) by the Chief Executive Officer of Customs (the CEO). This instrument was issued on 11 April 2008, declaring that certain dry mix plants are subject to a concession under item 50 of Schedule 4 to the Customs Tariff Act 1995. Under the terms of the Instrument, these dry mix plants will be subject to a free rate of customs duty, rather than the general rate of 5% that would otherwise apply.
The CEO is required under section 269C of the Act to assess whether the application for a Tariff Concession Order (TCO) meets the core criteria, which are defined in section 269B and 269D of the Act. Specifically, the CEO must determine if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application meets these criteria, the CEO must issue a written TCO, as mandated by section 269P(3) of the Act. In this case, the CEO was satisfied that no such substitutable goods existed, leading to the issuance of the Instrument on 11 April 2008.
The Instrument imposes several obligations on the parties involved. Firstly, the CEO must ensure that the application for a TCO meets the core criteria set out in the Act. If these criteria are met, the CEO must make the TCO. Furthermore, the CEO is required to publish a notice in the Gazette under subsection 269K(1) of the Act, inviting any person who believes there are reasons why the TCO should not be made to submit their views. In this instance, the CEO did not receive any submissions opposing the TCO. Additionally, the Act requires that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, and it does not impose any liabilities on any person.
Breach of the provisions outlined in the Act can result in various civil and criminal consequences. Under section 271 of the Act, a person who contravenes a provision of the Act can be subject to a penalty. For certain offences, the maximum penalty can be substantial. For example, subsection 271(1) of the Act provides that a person can be fined up to 10,000 penalty units or imprisonment for five years, or both, for serious offences. Additionally, subsection 271(3) allows for lesser penalties for less serious offences, such as fines up to 1,100 penalty units or imprisonment for 12 months, or both. These penalties serve as a deterrent against non-compliance with the requirements of the Act and the terms of the Instrument.