EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803897
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.
J C Steele & Sons Australia LLC applied for a TCO in respect of certain combined de airing extrusion machine on 13 March 2008.
Instrument
TCO No 0803897 was made on 30 May 2008. It declares that those certain combined de airing extrusion machine 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. 0803897 is taken to have come into force on 13 March 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, provides a framework for the imposition of customs duties on imported goods. One of the mechanisms within this Act is the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The purpose of these orders is to grant lower rates of customs duty on certain goods, provided the application for such a concession meets specific criteria. This initiative aims to facilitate trade by reducing the cost burden on importers of goods that are not produced domestically or are substitutable with imported alternatives. The explanatory statement for Tariff Concession Instrument No. 0803897, made on 30 May 2008, exemplifies this process. In this instance, the application from J C Steele & Sons Australia LLC for a TCO on certain combined de-aerating extrusion machines was successful, resulting in a free rate of duty on these goods, as no substitutable goods were produced in Australia. This measure effectively benefits importers by potentially reducing their duty liabilities on these specific goods.
Scope and Application
The Tariff Concession Instrument No. 0803897 under the Customs Act 1901 applies specifically to the combined de airing extrusion machines, granting them tariff concessions for customs duty purposes. The legislation targets entities that are engaged in the importation of these specific machines, with the aim of providing economic benefits by reducing the duty rate to free from the general rate of 5%. The Act applies on a national level across Australia, governed by the Commonwealth. The application of the Tariff Concession Order (TCO) is limited to goods that meet the criteria outlined in the Customs Act 1901, ensuring that only those goods for which there are no substitutable products produced in Australia qualify for the concession. There are no exclusions or exemptions specified in the legislation itself, but the scope of the concession is restricted by the types of goods that can be subject to a TCO, as delineated in section 269SJ of the Act. The application and enforcement of the TCO may be further defined or extended through subordinate instruments or regulations.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0803897 (the Instrument) are Sections 269C, 269P, and 269S, which are provisions of the Customs Act 1901. Section 269C outlines the core criteria that an application for a Tariff Concession Order (TCO) must meet, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) requires the Chief Executive Officer (CEO) of Customs to make a written order if the application meets the core criteria, and Section 269S specifies the commencement date for the TCO. Specifically, TCO No. 0803897 applies to certain combined de-aerating extrusion machines, declaring that they are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%.
The Instrument imposes certain obligations on the parties it governs. Firstly, any person seeking a TCO must ensure their application meets the core criteria specified in Section 269C of the Customs Act 1901. This involves proving that no substitutable goods were produced in Australia on the day the application was lodged. The CEO is obligated to review the application and, if satisfied, make a written TCO as specified in Section 269P(3). Additionally, under Section 269K(1) of the Customs Act, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO did not receive any submissions in response to the notice for TCO No. 0803897.
The Customs Act 1901 includes provisions for offences and penalties for non-compliance with the Act’s requirements. However, the explanatory statement does not detail specific offences or penalties related to TCOs. The primary focus of the Instrument is on the procedural and substantive aspects of granting tariff concessions rather than penal measures. It is important to note that the TCO itself does not impose any liabilities on any person, and the rights of importers will be beneficially affected. Importers can apply for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.
In summary, TCO No. 0803897 facilitates tariff concessions for certain combined de-aerating extrusion machines, reducing the duty rate from 5% to free. The process involves meeting specific core criteria, application review by the CEO, and publication of the notice in the Gazette. The Act does not detail specific penalties for non-compliance with TCO provisions, but it ensures that the rights of importers are beneficially affected, allowing them to seek duty refunds. The TCO does not disadvantage any person or impose liabilities except as specified within the Act.