EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817093
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.
Vemag Australia applied for a TCO in respect of certain vacuum packing machine on 10 July 2008.
Instrument
TCO No 0817093 was made on 03 October 2008. It declares that those certain vacuum packing 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. 0817093 is taken to have come into force on 10 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 Tariff Concession Instrument No. 0817093, enacted under the Customs Act 1901, was introduced to provide a lower rate of customs duty on certain goods that are not produced in Australia and do not have substitutable alternatives domestically. This legislation allows for the application of tariff concessions on specific items, such as vacuum packing machines, thereby facilitating their importation at a reduced duty rate. The instrument was developed in response to an application by Vemag Australia, and the decision to grant the concession was based on the absence of substitutable goods being produced in Australia. The instrument was implemented to ensure that importers benefit from the tariff concession without imposing any liabilities or disadvantaging other stakeholders.
The Tariff Concession Order (TCO) was issued by the Chief Executive Officer of Customs, following the necessary criteria and consultation process outlined in the Customs Act 1901. The CEO determined that the application met the core criteria, leading to the issuance of TCO No. 0817093, which came into effect on 10 July 2008. The instrument effectively reduces the general duty rate of 5% on vacuum packing machines to free, benefiting importers who can now apply for a refund of duty on goods imported since the effective date. The legislation ensures that the rights of importers are positively impacted, while not affecting the rights or imposing liabilities on other parties.
Scope and Application
The Tariff Concession Instrument No. 0817093, made under the Customs Act 1901, applies to a specific class of vacuum packing machines, providing them with a concession that effectively reduces the rate of customs duty from the general rate of 5% to free. This instrument is pertinent to entities or individuals importing these machines into Australia, and its application is limited to the specified goods, ensuring that no broader rights or liabilities are affected outside the scope of the concession. Geographically, the Act's jurisdiction is Commonwealth-wide, thereby extending its reach across the entire nation. Importantly, the Act excludes certain goods, as outlined in section 269SJ, from being subject to a Tariff Concession Order (TCO). The Act also allows for further application and extension through subordinate instruments, providing flexibility in addressing new situations or goods that meet the specified criteria.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0817093 under the Customs Act 1901 (section 269F) involve the application process for Tariff Concession Orders (TCO) and the criteria for approval by the Chief Executive Officer of Customs (CEO) (section 269C). Section 269C requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as defined in sections 269D and 269E of the Act. If the CEO is satisfied that the application meets these core criteria, a TCO is to be made (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received (subsection 269K(1)).
The obligations imposed by the Act on parties include ensuring that applications for TCOs are made in accordance with the statutory requirements, particularly focusing on the core criteria regarding the production of substitutable goods in Australia. The CEO has a duty to assess these applications rigorously and publish notices in the Gazette to allow for any objections. Furthermore, the CEO must ensure that TCOs do not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO is registered (subsection 269S(1)). Importers who meet the criteria for the TCO can benefit from applying for a refund of duty on goods imported since the effective date of the TCO.
There are no specific offences, penalties, or consequences outlined for breaches of the TCO in the explanatory statement provided. However, the Act generally allows for enforcement actions against any party that fails to comply with its provisions, including potential legal actions for non-compliance. The penalties for breaches of customs legislation can include fines and imprisonment, depending on the severity of the breach and the specific provisions of the Customs Act 1901 that are contravened. The maximum penalties for breaches of customs laws can vary widely but may include significant fines and lengthy imprisonment terms for serious or repeated offences.