EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829416
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.
Laminex Group Pty Ltd applied for a TCO in respect of certain spray booths on 03 September 2008.
Instrument
TCO No 0829416 was made on 21 November 2008. It declares that those certain spray booths 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. 0829416 is taken to have come into force on 03 September 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 Commonwealth Parliament, provides a framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). The problem or gap that the TCO scheme addresses is the potential for high customs duty rates on imported goods that have no domestic equivalent, which can hinder trade and increase costs for businesses. This scheme was introduced to ensure that Australian businesses are not placed at a competitive disadvantage when importing goods for which there are no domestic substitutes. The Explanatory Statement for Tariff Concession Instrument No. 0829416, which was made under the Customs Act 1901, indicates that it was enacted to provide tariff concessions for specific goods, in this case, certain spray booths, where no substitutable goods were produced in Australia in the ordinary course of business. The policy objective is to support Australian businesses by reducing the cost of importing goods for which no domestic alternative exists, thus promoting economic efficiency and fairness in trade.
Scope and Application
The Tariff Concession Instrument No. 0829416 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods. This act pertains to applications for Tariff Concession Orders (TCOs), which can be made by anyone eligible under the Act. The concessions are specifically for goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods are available locally. This concession scheme is applicable nationally as it falls under the Commonwealth jurisdiction. The concessions provided by this instrument do not affect the rights of any person other than the Commonwealth as at the date of registration and do not impose any liabilities on anyone. The CEO of Customs must decide whether an application meets the core criteria, which involves determining if no substitutable goods are produced in Australia. The application of the TCO is effective from the date the application was lodged, as per the provisions of the Customs Act 1901. This instrument extends its application through subordinate instruments such as the Customs Tariff Act 1995 and the Customs Regulations 1995.
Key Provisions
The Tariff Concession Order No. 0829416, issued under the Customs Act 1901, pertains to the tariff concession for certain spray booths, specifying the application of a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The order, which came into effect on 03 September 2008, is designed to provide a lower rate of customs duty on these goods, effectively setting the duty rate at free, as opposed to the general rate of 5% (sections 269F, 269S(1)). This order applies to goods for which Laminex Group Pty Ltd made an application on 03 September 2008, and it is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C).
The obligations under this Act primarily rest on the Chief Executive Officer of Customs, who must ensure that the application for a tariff concession meets the specified core criteria before making an order. This includes verifying that the goods in question are not of a type that is already being produced in Australia in the ordinary course of business and that there are no substitutable goods available domestically (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have objections to the tariff concession order being made (subsection 269K(1)).
Should the CEO fail to adhere to the requirements set out in the Customs Act 1901, or if any party breaches the terms of the Tariff Concession Order, there may be legal consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of the Act could potentially lead to civil or criminal actions, with penalties that vary depending on the severity and nature of the breach. The Act, in general, allows for enforcement actions to be taken against those who do not comply with its provisions, including the imposition of fines or other penalties as prescribed by law.