EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812470
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.
Bitzer Australia Pty Limited applied for a TCO in respect of certain pressure vessels on 12 June 2008.
Instrument
TCO No 0812470 was made on 01 September 2008. It declares that those certain pressure vessels 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. 0812470 is taken to have come into force on 12 June 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 for the regulation of customs and excise duties. Specifically, Part XVA of the Act establishes a framework for Tariff Concession Orders (TCOs), which allow the Chief Executive Officer of Customs to reduce customs duty rates on certain goods, provided they meet the specified criteria. Enacted to address the gap in providing tariff concessions for goods that are not produced domestically, the Act aims to facilitate trade by making imported goods more competitive. The Tariff Concession Instrument No. 0812470, made on 1 September 2008, is an example of this framework in action, granting tariff concessions on certain pressure vessels. The process involves an application to the CEO, assessment against the core criteria, and a notice period for public submissions, which in this case, resulted in no objections. The TCO benefits importers by allowing them to apply for duty refunds on goods imported since the effective date of the concession, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0812470 under the Customs Act 1901 applies to pressure vessels specified in the instrument, granting a tariff concession that reduces the duty from the general rate of 5% to zero. This concession is applicable to goods imported under the conditions specified in the instrument, provided that the application for the tariff concession meets the core criteria outlined in the Act. Specifically, the CEO of Customs must be satisfied that no substitutable goods were produced in Australia at the time of the application, meaning there are no Australian-made alternatives to the imported goods that can serve the same use or design purpose. The instrument specifically addresses the application made by Bitzer Australia Pty Limited concerning certain pressure vessels, which was lodged on 12 June 2008 and came into effect on the same date. The application was processed without any submissions opposing the concession, and the tariff concession order was made on 1 September 2008. This legislation applies nationally within Australia and does not impose any liabilities on persons other than the Commonwealth. The scope of the Act includes any goods specified in a valid Tariff Concession Order, with exclusions based on the criteria of substitutable Australian-made goods. The Act’s application may be extended through subordinate instruments, allowing for further clarification and detailed regulation of the concession criteria.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269S. Section 269F (1) allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). The CEO is then required to consider whether the application meets the core criteria, which are detailed in section 269C. If the CEO determines that the application meets these criteria, they must issue a written TCO, as specified in section 269P(3). Section 269S outlines the commencement of the TCO, stating that it comes into force on the day the application is lodged.
The obligations and requirements imposed by the Act on parties include the necessity for applicants to ensure their applications meet the criteria set out in section 269C. The CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons for opposing the TCO, as per section 269K(1). The CEO must then consider any submissions received before deciding whether to issue a TCO. The applicant must also ensure that their application is not for goods specified in section 269SJ, which are ineligible for a TCO.
For breaches of the provisions outlined in this legislation, the primary consequences relate to the incorrect application or misuse of a TCO. If a party is found to have provided false or misleading information in an application for a TCO, they may face civil or criminal penalties. The maximum penalties for providing false or misleading information can include substantial fines and, in some cases, imprisonment. These penalties are intended to deter non-compliance and ensure the integrity of the tariff concession scheme.
Additionally, while the Act does not explicitly outline specific penalties for breaches related to the TCO itself, breaches of the broader Customs Act 1901 may result in penalties. For example, penalties for false statements or misleading information under the Customs Act can include fines of up to $22,200 for individuals and $111,000 for corporations, along with potential imprisonment terms. The Act also provides for the recovery of duties and taxes if a TCO is found to have been improperly obtained, with the potential for interest and additional penalties accruing on the amounts owed.