EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828678
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.
Inghams Enterprises Pty Ltd applied for a TCO in respect of certain conveyor on 28 August 2008.
Instrument
TCO No 0828678 was made on 14 November 2008. It declares that those certain conveyor 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. 0828678 is taken to have come into force on 28 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, includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for a lower rate of customs duty on certain goods. This legislative measure was introduced to address a gap in the tariff structure by facilitating the importation of goods that are not produced in Australia and for which there are no suitable substitutes available domestically. The policy objective is to encourage trade by reducing the cost of importing goods, thereby benefiting businesses and consumers. In the case of Tariff Concession Instrument No. 0828678, the Chief Executive Officer of Customs granted a concession for certain conveyors, reducing the duty rate from 5% to free, effective from 28 August 2008. The instrument was published in the Gazette with an invitation for submissions, none of which were received, and hence, the TCO was enacted without opposition.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. This provision applies to any person who can demonstrate that the goods they seek to import are not substitutable by goods produced in Australia and that no such substitutable goods are produced in the ordinary course of business. The Act applies nationally across Australia as it is Commonwealth legislation. The instrument in question, TCO No. 0828678, was made in respect of certain conveyors applied for by Inghams Enterprises Pty Ltd on 28 August 2008, and it came into effect on the same day. This order reduced the duty on these specific goods from the general rate of 5% to free, provided the CEO was satisfied with the application criteria. The Act does not disadvantage any person other than the Commonwealth and does not impose any new liabilities; instead, it potentially benefits importers by allowing them to apply for a refund of duty paid on these goods since the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0828678, made under the Customs Act 1901, declare that certain conveyors are subject to a zero rate of customs duty, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This concession applies when the Chief Executive Officer (CEO) of Customs determines that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). The instrument was made on 14 November 2008, following an application by Inghams Enterprises Pty Ltd on 28 August 2008. The instrument came into force on the same day as the application was lodged, 28 August 2008 (subsection 269S(1)).
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to assess whether an application for a Tariff Concession Order (TCO) meets the core criteria, specifically whether no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to the prescribed tariff concession (subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The CEO is also required to consider any submissions received and make a final decision on the application.
Should any party fail to comply with the obligations outlined in the Customs Act 1901, there may be civil or criminal consequences. While the explanatory statement does not specify particular offences or penalties, breaches of the Act can generally lead to penalties under sections such as 272, which may include fines or imprisonment. For example, knowingly or recklessly making a false statement in an application for a TCO can result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both (subsection 272(1)). Furthermore, any person who knowingly contravenes a provision of the Act may face additional penalties as determined by the court.
The Tariff Concession Instrument No. 0828678 ensures that the rights of persons other than the Commonwealth are not adversely affected by the instrument, and it does not impose any new liabilities on such persons (subsection 269S(2)). Importers of the goods subject to the TCO can benefit by applying for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). This ensures that the instrument operates fairly and without imposing undue burdens on affected parties.