EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803225
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.
Gea Process Engineering Australia Pty Ltd applied for a TCO in respect of certain beer filtration apparatus on 11 April 2008.
Instrument
TCO No 0803225 was made on 04 July 2008. It declares that those certain beer filtration appratus 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. 0803225 is taken to have come into force on 11 April 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. 0803225 was enacted in 2008 under the Customs Act 1901 to provide a mechanism for tariff concessions for specific goods, thereby addressing the need for a streamlined process to lower customs duties for certain imported products not produced domestically. This legislative instrument was developed by the Australian Government to facilitate easier access to specific goods, particularly where domestic alternatives are not readily available. The Customs Act 1901, enacted by the Australian Parliament, provides the framework for administering customs and excise duties and includes provisions for tariff concession orders to be made by the Chief Executive Officer of Customs. The policy objective is to support economic efficiency and consumer choice by potentially lowering the cost of imported goods, thereby promoting competitive markets. The instrument aims to ensure that the rights of importers are protected and that no individual or entity is adversely affected by the implementation of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0803225, which applies under Part XVA of the Customs Act 1901, pertains to the process of granting tariff concessions for specific goods, in this instance, certain beer filtration apparatus. This instrument applies to the entity that submitted the application, in this case, Gea Process Engineering Australia Pty Ltd, and to any other entities importing the same or similar goods that qualify for the concession. The application of this instrument is national in scope, as it is governed by Commonwealth legislation. It specifically excludes any goods listed in section 269SJ of the Customs Act 1901, which identifies goods that are ineligible for tariff concessions. The instrument came into force on 11 April 2008, the date the application was lodged, and does not affect any pre-existing rights or liabilities of parties other than the Commonwealth. Notably, the rights of importers will be positively impacted, as they may apply for a refund of duties on goods imported since the effective date of the concession.
Key Provisions
The main operative sections of this legislation revolve around the establishment and application of Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F (1) allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. Section 269C (1) outlines the core criteria that an application must meet, which is primarily determined by whether substitutable goods were produced in Australia on the day the application was lodged. Section 269P (3) mandates that if the CEO is satisfied that the application meets the core criteria, a written order, or TCO, must be made, specifying the reduced duty applicable to the goods. The TCO in this instance (TCO No. 0803225) pertains to certain beer filtration apparatus, declaring them subject to a zero rate of duty as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Customs Act 1901 on the parties involved are multifaceted. The CEO of Customs must ensure that any TCO application that does not involve goods specified in section 269SJ of the Act is assessed against the core criteria. This involves verifying that no substitutable goods were produced in Australia on the date the application was made, as per section 269C (1). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be granted, as per section 269K (1). The CEO's obligations also include ensuring that the rights of the Commonwealth and importers are not adversely affected by the TCO, while allowing for the potential refund of duty on goods imported since the effective date of the TCO, as per paragraph 126 (1) (r) of the Regulations.
In terms of potential offences, penalties, or civil/criminal consequences for breach, the Customs Act 1901 does not explicitly outline specific penalties for failing to comply with the provisions of a TCO. However, general provisions of the Customs Act and related regulations may impose penalties for non-compliance with customs duties and related obligations. For example, section 218 of the Customs Act prescribes a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, for fraudulent importation or exportation of goods. While these penalties are not directly related to TCOs, they underscore the seriousness with which non-compliance with customs regulations is treated. Additionally, importers may face financial penalties if they fail to correctly apply for duty refunds under the Regulations, which could result in financial loss or legal action against the non-compliant party.