EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826221
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.
Laserlife Australia Pty Ltd applied for a TCO in respect of certain automatic plasma spray system on 12 August 2008.
Instrument
TCO No 0826221 was made on 07 November 2008. It declares that those certain automatic plasma spray 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. 0826221 is taken to have come into force on 12 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 was amended by the Tariff Concession Instrument No. 0826221, introduced in 2008, to address the issue of tariff concessions for specific goods, allowing for reduced customs duties on certain items not produced domestically. This Act, enacted by the Parliament of Australia, aims to facilitate the importation of goods that have no substitutable domestic alternatives, thereby supporting economic efficiency and competitive markets. The instrument, which was made by the Chief Executive Officer of Customs under section 269F, specifies that the application for a Tariff Concession Order (TCO) for certain automatic plasma spray systems was accepted as valid, as no substitutable goods were produced in Australia. Consequently, these goods are subject to a zero percent duty rate under the prescribed item of Schedule 4 to the Customs Tariff Act 1995, as opposed to the general rate of five percent.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process for issuing Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs. This legislation applies to individuals and entities seeking to import goods that are not produced in Australia in the ordinary course of business and that do not have substitutable goods available domestically. The Act provides a framework for these applicants to request a TCO, which, if granted, results in a reduced rate of customs duty on the specified goods. The TCOs are subject to certain criteria and conditions outlined in the Act, ensuring that the application aligns with the broader objectives of the customs duty scheme. The Act applies on a Commonwealth level and does not specify exclusions beyond those outlined in section 269SJ, which pertains to goods that cannot be subject to a TCO. The TCOs themselves are subject to further regulation and interpretation through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the duty rates applicable to the goods in question. The TCO No. 0826221, for instance, pertains to certain automatic plasma spray systems, which are granted a free duty rate instead of the general 5% duty.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0826221 (referred to as TCO No. 0826221) under the Customs Act 1901 are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, they must make a written order (TCO), as stated in section 269P(3). This TCO declares that the goods specified in the application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this case, the TCO No. 0826221 declares that certain automatic plasma spray systems are subject to a free rate of duty, as opposed to the general rate of 5%.
The Customs Act 1901 imposes several obligations on the parties involved. The CEO is required to determine whether an application for a TCO meets the core criteria and, if it does, to make a written order. The CEO must also publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO, as per section 269K(1). In this case, no submissions were received in response to the published notice. Furthermore, section 269S(1) specifies that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged.
Breaches of the provisions within the Customs Act 1901 can result in various civil and criminal consequences. Although the explanatory statement does not specify any particular offences or penalties related to TCOs, general contraventions of the Customs Act can result in penalties as outlined in the Customs (Prohibited Imports) Regulations 1956. These penalties can include fines, imprisonment, or both, depending on the severity of the offence. For example, under section 124 of the Customs Act, a person who contravenes the Act or Regulations can be subject to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both, for a single offence. For multiple offences, the penalties can be even more severe.
In summary, TCO No. 0826221 under the Customs Act 1901 allows for a concessional rate of customs duty on certain automatic plasma spray systems, provided the core criteria are met. The CEO is responsible for determining whether an application meets these criteria and for publishing notices in the Gazette inviting submissions. The TCO does not impose any liabilities on any person, and the rights of importers will be beneficially affected. Breaches of the Customs Act can result in fines, imprisonment, or both, depending on the nature and severity of the offence.