EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802471
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.
Efficient Dispensing Systems Pty Ltd applied for a TCO in respect of certain automatic dispensing machines on 13 February 2008.
Instrument
TCO No 0802471 was made on 18 April 2008. It declares that those certain automatic dispensing 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. 0802471 is taken to have come into force on 13 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 Parliament of Australia, provides a framework for the administration of customs and excise duties. It includes provisions for the making of Tariff Concession Orders (TCOs) under Part XVA, which allow for reduced or waived customs duties on certain goods. This legislative instrument addresses the problem of facilitating access to specific goods that are not produced domestically by granting tariff concessions to importers. The instrument in question, Tariff Concession Instrument No. 0802471, was introduced to provide a tariff concession for certain automatic dispensing machines, ensuring that these goods attract a lower rate of duty when imported, thereby promoting their availability and affordability in the Australian market. The policy objective behind this concession is to encourage the importation of goods that are not manufactured locally, thus supporting market access and consumer choice.
Scope and Application
The Tariff Concession Order No. 0802471 under the Customs Act 1901 applies to specific automatic dispensing machines, providing a concession on customs duty rates for these goods. The application of this TCO is limited to goods for which no substitutable products are produced in Australia in the ordinary course of business, ensuring that local industries are not unfairly disadvantaged. This instrument extends to the Commonwealth jurisdiction and applies to any entities or individuals importing the specified machines, thereby reducing the duty from the general rate of 5% to a rate of free. However, the application does not affect the rights of any person adversely if they were incurred before the TCO's effective date of 13 February 2008. The scope of the TCO can be extended or refined through subordinate instruments, ensuring it remains aligned with current economic and trade policies.
Key Provisions
The key operative sections of this legislation (F2008L01818) under the Customs Act 1901 are sections 269C, 269F, 269P, and 269S, among others. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. The CEO must then determine whether the application meets the core criteria as outlined in section 269C, which involves assessing if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order under section 269P (3) declaring that the goods are subject to a prescribed rate of duty, in this case, a rate of zero percent.
The obligations imposed by the Act on the parties involved are primarily on the CEO. The CEO must ensure that any TCO application is reviewed thoroughly to ascertain if it meets the core criteria, including verifying that no substitutable goods were produced in Australia on the application date. Additionally, the CEO has an obligation to publish a notice in the Gazette, as per section 269K (1), inviting any person to submit objections to the TCO if they believe it should not proceed. The CEO must also consider any submissions received in response to this notice. In this instance, the CEO did not receive any submissions in response to the published notice.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline specific criminal or civil penalties for failing to comply with the provisions related to TCOs. However, non-compliance with customs regulations generally can lead to penalties under the Customs Act, which may include fines and, in severe cases, criminal prosecution. The penalties for breaches of customs regulations can vary significantly depending on the nature and severity of the breach, with fines potentially reaching up to $10,500 per offence for individuals and much higher for corporations. Furthermore, persistent or serious breaches can result in criminal charges, potentially leading to imprisonment.