EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817140
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.
Australian Paper Pty Ltd applied for a TCO in respect of certain centrifugal flanged pumps on 11 July 2008.
Instrument
TCO No 0817140 was made on 03 October 2008. It declares that those certain centrifugal flanged pumps 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. 0817140 is taken to have come into force on 11 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 Australian Parliament, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This Act addresses the issue of providing tariff concessions on specific goods that are not produced in Australia, thereby encouraging their importation and benefiting importers. In line with the Act, Australian Paper Pty Ltd applied for a TCO on certain centrifugal flanged pumps, which was subsequently granted on 3 October 2008. The policy objective is to reduce the duty rate on specified goods to zero, provided that no substitutable goods are produced domestically, thereby promoting trade and economic growth. The TCO, which came into effect on the date of the application, 11 July 2008, ensures that the rights of importers are protected and any liabilities are avoided for actions taken prior to the TCO's registration.
Scope and Application
The Customs Act 1901 applies to individuals and entities who are involved in the importation of goods into Australia, specifically regarding the application of customs duty. The Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can provide relief from customs duty for certain goods under specified conditions. The Act applies nationally across Australia, as it is a Commonwealth law. The application of a TCO is contingent upon meeting certain core criteria, such as the absence of substitutable goods produced in Australia at the time of application, and the goods not being specified as ineligible under section 269SJ of the Act. In the case of Australian Paper Pty Ltd, a TCO was granted for certain centrifugal flanged pumps, reducing the duty rate to free from 5%. This instrument is effective from the date the application was lodged, 11 July 2008, and does not retroactively affect any duties or rights, except to allow for duty refunds for importers of the specified goods since the effective date. The Act also mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this instance.
Key Provisions
The Customs Act 1901 (the Act) facilitates a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO) to reduce the customs duty on certain goods. Section 269F of the Act allows an application to be made for a TCO in respect of goods, provided they do not fall under the exclusions listed in section 269SJ. If the CEO is satisfied that the application does not involve goods that are specified as ineligible for a TCO and meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods are produced in Australia, the CEO is required to issue a written order granting the concession. In this case, TCO No. 0817140 was issued on 3 October 2008, declaring that certain centrifugal flanged pumps are subject to the TCO, as they are now duty-free under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the CEO when considering a TCO application. The CEO must ensure that the application is valid and not in respect of goods excluded under section 269SJ. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be granted (subsection 269K(1)). If no submissions are received, the CEO can proceed to make the TCO if the core criteria are satisfied. In this instance, Australian Paper Pty Ltd applied for the TCO on 11 July 2008, and no submissions were lodged against the application.
Breaching the provisions of the Customs Act 1901 can lead to civil or criminal penalties. For instance, if a person knowingly imports goods that are ineligible for a TCO or falsely claims a concession, they may face prosecution. The Act does not specify maximum penalties for such breaches, but penalties can include fines and imprisonment, as determined by the court. Additionally, any person who fails to comply with the terms of a TCO may face civil consequences, such as being liable for the duty owed on the goods. It is crucial for applicants and importers to ensure they meet all requirements and obligations under the Act to avoid these potential penalties.