EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0825940
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.
Tyrolit Australia Pty Ltd applied for a TCO in respect of certain grinding and polishing shoes and discs on 11 August 2008.
Instrument
TCO No 0825940 was made on 24 October 2008. It declares that those certain grinding and polishing shoes and discs 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. 0825940 is taken to have come into force on 11 August 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, establishes a framework for the regulation of customs and excise in Australia. The Act provides for the imposition of customs duty on imported goods, among other things. The Tariff Concession Instrument No. 0825940 was introduced to address the specific need for tariff concessions on certain goods that were not being produced domestically and could benefit from lower import duties. This instrument was designed to facilitate trade by reducing the cost of importing specific goods, thereby promoting economic efficiency and competitiveness. The policy objective of this legislation is to support Australian industries by ensuring that essential goods are available at a reduced cost, which can help businesses remain competitive in the global market. The instrument was created under the authority granted by the Customs Act, allowing the Chief Executive Officer of Customs to make orders that provide tariff concessions where appropriate.
Scope and Application
The Tariff Concession Instrument No. 0825940 applies to the goods specified in the Instrument, namely certain grinding and polishing shoes and discs, and is a measure under the Customs Act 1901, extending to the Commonwealth jurisdiction. The Instrument was made by the Chief Executive Officer of Customs following an application by Tyrolit Australia Pty Ltd, and it was effective from the date the application was lodged, 11 August 2008. The Act enables the CEO to make a Tariff Concession Order (TCO) if certain criteria are met, primarily that no substitutable goods are produced in Australia at the time the application is lodged. The CEO must also ensure the application does not concern goods explicitly excluded under section 269SJ of the Act. This Instrument reduces the duty on specified goods from the general rate of 5% to free, benefiting importers who can apply for duty refunds on imports since the effective date. Notably, the TCO does not disadvantage any person or impose liabilities for actions taken before its registration, thus maintaining fairness and clarity in its application.
Key Provisions
The Customs Act 1901, particularly Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO) to reduce customs duty on certain goods. Section 269F allows for applications to the CEO for such concessions, provided the goods in question do not fall under the exclusions listed in section 269SJ. A TCO can be granted if, on the application date, no substitutable goods are produced in Australia in the ordinary course of business, as stipulated in sections 269C and 269P(3). The CEO must also determine that the application meets the core criteria, which includes confirming that 'substitutable goods', defined under section 269D, do not exist in Australia. Once the CEO is satisfied that the application meets these criteria, they must issue a written TCO. In the case of Tyrolit Australia Pty Ltd, a TCO was granted for specific grinding and polishing shoes and discs on 24 October 2008, reducing their duty from the general rate of 5% to free.
Under the Customs Act 1901, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is accepted as valid, as per subsection 269K(1). The CEO must consider these submissions before making a decision on the TCO. In the case of Tyrolit Australia Pty Ltd, no submissions were received. Moreover, a TCO is deemed to come into effect on the date the application is lodged, as outlined in subsection 269S(1). Therefore, TCO No. 0825940 is effective from 11 August 2008. Importantly, the TCO does not retroactively disadvantage any person or impose liabilities for actions taken before its registration.
Failure to comply with the provisions of the Customs Act 1901 regarding Tariff Concession Orders may lead to legal consequences. The Act does not explicitly state penalties for non-compliance with TCO requirements. However, breaches of related customs regulations may result in penalties under the Customs Act 1901, including fines and imprisonment. For instance, under section 237, knowingly making a false statement or providing false information can incur a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, section 238A imposes penalties for failure to comply with customs regulations, which could include fines or imprisonment depending on the severity of the breach. Importers and exporters must therefore ensure compliance with both the TCO and the broader customs regulations to avoid these penalties.