EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816125
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.
Solar Eggs applied for a TCO in respect of certain egg grading and packing machines on 04 July 2008.
Instrument
TCO No 0816125 was made on 19 September 2008. It declares that those certain egg grading and packing 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. 0816125 is taken to have come into force on 04 July 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 Commonwealth Parliament, establishes a framework for the administration of customs duties and the regulation of imported goods. It includes provisions for the creation of Tariff Concession Orders (TCOs) to provide tariff concessions on certain goods under specific circumstances. The Act was introduced to streamline the process of applying for and granting tariff concessions, thereby facilitating trade by reducing customs duty burdens on eligible imported goods. The explanatory statement for Tariff Concession Instrument No. 0816125, made under the Customs Act 1901, illustrates this process. Solar Eggs applied for a TCO for certain egg grading and packing machines, and after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, a TCO was issued. This instrument, effective from the date of the application, grants a duty-free status to the specified machines, thereby promoting their importation and use in Australia without the burden of customs duty.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application of tariff concessions through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity seeking tariff concessions for imported goods, provided the goods do not fall under the restricted categories specified in section 269SJ. The application process requires the CEO to evaluate whether the goods in question are not substitutable by any goods produced in Australia, as defined by sections 269D and 269E of the Act. The scope of this legislation is national, with the CEO making decisions that impact import duties across Australia. Notably, the legislation does not impose any disadvantages or liabilities on persons other than the Commonwealth regarding actions taken prior to the TCO's registration. This legislative framework is further extended through subordinate instruments, allowing for detailed specifications and conditions surrounding the application and effect of TCOs.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process for Tariff Concession Orders (TCOs), which are applied by the Chief Executive Officer of Customs (CEO) to certain goods. A TCO allows for a lower rate of customs duty on goods specified in the order. An applicant can submit a request for a TCO to the CEO under section 269F, provided the goods are not specified in section 269SJ, which lists goods ineligible for TCOs. The CEO must then determine if the application meets the core criteria, as stipulated in section 269C. These criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The Act defines "substitutable goods" under section 269B as goods produced in Australia that are put, or capable of being put, to a use that corresponds with the use of the goods the subject of the application. If the CEO is satisfied that the application meets these criteria, they are mandated by subsection 269P(3) to make a written order that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This instrument, TCO No. 0816125, applies a free rate of duty on certain egg grading and packing machines, previously subject to a 5% duty.
The CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO, as per subsection 269K(1). In this case, no submissions were received, indicating no objections to the concession. The TCO comes into effect on the day the application was lodged, as stated in subsection 269S(1). Importantly, the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the date of registration. Importers, however, benefit from being able to apply for a refund of duty on goods imported since the effective date of the TCO.
Failure to comply with the provisions of the Customs Act 1901 or the associated regulations can result in civil or criminal penalties. The Act does not specify penalties for non-compliance with TCO provisions, but general provisions of the Act and related regulations may apply. These could include fines or imprisonment for serious breaches, with the exact penalties depending on the nature and severity of the offence. It is essential for parties involved to adhere to the requirements set out in the Act to avoid these potential consequences.