EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0813445
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.
Mettler Toledo Ltd applied for a TCO in respect of certain in line weighing and metal detection system on 18 June 2008.
Instrument
TCO No 0813445 was made on 08 September 2008. It declares that those certain in line weighing and metal detection system 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. 0813445 is taken to have come into force on 18 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, as amended, provides a framework for the administration of customs duties and the facilitation of international trade. One of the mechanisms under this Act is the establishment of Tariff Concession Orders (TCOs) which allow for the reduction or exemption of customs duties on certain goods. Enacted by the Parliament of Australia, the Customs Act 1901 aims to streamline the importation process and encourage fair trade practices by providing relief where appropriate. Specifically, the introduction of Tariff Concession Orders addresses the problem of ensuring that Australian industries remain competitive without the burden of unnecessary tariffs on goods that are not produced domestically. The policy objective behind this is to foster economic efficiency and support industries that rely on imported components or goods for their operations, thus contributing to overall economic growth.
Scope and Application
The Customs Act 1901, under its Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs), which enable the Chief Executive Officer of Customs to reduce the rate of customs duty on specified goods. This applies to any person or entity that imports goods eligible for a TCO, provided that the application complies with the core criteria set out in the Act, specifically that no substitutable goods are produced in Australia. The application process involves submitting an application to the CEO, who must then determine whether the application meets the core criteria, including that the goods in question are not those specified in section 269SJ of the Act as ineligible for a TCO. The application's geographic reach is effectively national, as it applies to all imports into Australia that meet the criteria for a concession. The TCO itself does not disadvantage any person or impose new liabilities, and it does not affect the rights of any person as at the date of registration in respect of anything done or omitted before the registration date. The scope of the Act can be extended or further defined through subordinate instruments, such as regulations or orders, which may provide additional detail on the application process or specific categories of goods.
Key Provisions
The key operative sections of this legislation, specifically Tariff Concession Instrument No. 0813445, are sections 269C, 269F, 269P, and 269S of the Customs Act 1901, as well as section 50 of Schedule 4 to the Customs Tariff Act 1995. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria outlined in section 269C, they must make a written order, as stipulated in section 269P, declaring that the specified goods are subject to a lower rate of duty. This lower rate is determined by the relevant item in Schedule 4 to the Customs Tariff Act 1995, such as the free rate applied in this case under item 50.
The Act imposes several obligations on the parties it governs. Firstly, the CEO is required to ensure that any application for a TCO does not pertain to goods specified in section 269SJ of the Act, which excludes certain goods from the scheme. Secondly, the CEO must verify that no substitutable goods are produced in Australia on the day the application is lodged. If the application meets these criteria, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per section 269K. Additionally, section 269S specifies that a TCO is effective from the date the application is lodged.
Any breach of the requirements set out in the Customs Act 1901 may lead to various consequences. While the Explanatory Statement does not explicitly outline specific offences or penalties for non-compliance with the TCO process itself, general provisions in the Customs Act may apply. These could include fines and imprisonment for offences such as the provision of false information in an application or the importation of goods without the necessary concessions. The maximum penalties would depend on the specific nature and severity of the breach, as determined by the relevant sections of the Customs Act.