EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829426
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.
Lisec Australia Pty Ltd applied for a TCO in respect of certain extruders on 03 September 2008.
Instrument
TCO No 0829426 was made on 28 November 2008. It declares that those certain extruders 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. 0829426 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 Tariff Concession Instrument No. 0829426, enacted under the Customs Act 1901, addresses the need for tariff concessions to facilitate the importation of specific goods. The instrument was introduced to provide relief from customs duties for certain extruders, as applied by Lisec Australia Pty Ltd, by lowering the duty rate from 5% to free. The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) when specific criteria are met, primarily ensuring that no substitutable goods are produced in Australia. This legislative measure was developed to encourage the importation of these goods without imposing additional burdens or liabilities on entities other than the Commonwealth, and it allows for potential duty refunds for importers of such goods. The instrument was made effective from the date of the application, 3 September 2008, and no objections were received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0829426 under the Customs Act 1901 applies to goods specified in the instrument, which in this instance are certain extruders. The Act facilitates the concession of lower rates of customs duty for such goods, provided they are not specified in section 269SJ of the Act and meet the core criteria as stipulated in section 269C. The instrument applies to any entity or individual seeking to import the specified extruders into Australia. The geographic reach of the Act is national, with the instrument's application extending throughout the Commonwealth of Australia. Any exclusions or exemptions are detailed within the Act itself, specifically in section 269SJ, which lists goods that cannot be subject to a TCO. The Act allows for the extension or restriction of its application through subordinate instruments, such as regulations and orders, which provide further detail and operational guidelines. The Tariff Concession Order No. 0829426 effectively reduces the duty on the specified extruders from 5% to free, with the order coming into force on the date the application was lodged, 3 September 2008.
Key Provisions
The Tariff Concession Instrument No. 0829426 under the Customs Act 1901, specifically section 269F (3) and section 269P, sets out the conditions under which the Chief Executive Officer (CEO) of Customs may make a Tariff Concession Order (TCO). If the CEO is satisfied that an application for a TCO meets the core criteria outlined in section 269C and that no substitutable goods were produced in Australia at the time the application was lodged, the CEO must issue a written order that declares the goods to which the concession applies. In this instance, the TCO No. 0829426 made on 28 November 2008 declares that certain extruders are subject to a free rate of duty rather than the general rate of 5%.
The obligations under this Act require the CEO to ensure that the application for a TCO complies with the core criteria. This includes verifying that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO, and that no substitutable goods were produced in Australia at the time of the application. If the CEO finds that the application meets these criteria, the CEO must promptly issue the TCO and publish a notice in the Gazette inviting submissions from any interested parties, as per section 269K(1). In this case, no submissions were received.
Under this Act, the CEO's failure to comply with the requirements for issuing a TCO or neglecting to follow the necessary procedures could result in legal consequences. The Act does not specify any particular offences, penalties, or consequences for breaches; however, the general provisions of the Customs Act 1901 would apply. Any failure to comply with the Customs Act could result in civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The maximum penalties for breaches of the Customs Act can vary widely, typically ranging from fines of up to $22,000 and/or imprisonment for up to five years for individuals, and fines up to $110,000 for corporations. These penalties underscore the importance of adhering to the legislative requirements and procedures when applying for and issuing a TCO.