EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831550
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.
Jasco Pty Ltd applied for a TCO in respect of certain air cushion production machine on 15 September 2008.
Instrument
TCO No 0831550 was made on 05 December 2008. It declares that those certain air cushion production machine 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. 0831550 is taken to have come into force on 15 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 was amended to introduce the concept of Tariff Concession Orders (TCOs) through Part XVA, which allows the Chief Executive Officer of Customs to grant concessions on customs duty for specific goods. This legislative change was enacted to address the gap in tariff relief for goods that were not substitutable by Australian-produced alternatives, thereby encouraging import diversity and economic efficiency. The Parliament of Australia introduced this measure to ensure that businesses could access necessary goods at a reduced duty rate, fostering a competitive market environment. The policy objective is to facilitate the import of goods that are not produced domestically, thereby enhancing consumer choice and supporting industries reliant on imported materials.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders allow for a reduced rate of customs duty on specified goods, provided the application for the concession meets the core criteria set forth in the Act. The scope of the Act applies to individuals or entities who seek to import goods that are eligible for a tariff concession. The Act’s jurisdictional reach is national, as it is a Commonwealth Act. The Act excludes certain goods from being subject to a TCO as specified in section 269SJ. Furthermore, the Act allows for the application of the concession retroactively to the date of the application lodging, ensuring that no person other than the Commonwealth is disadvantaged or subjected to liabilities for actions prior to the order’s registration. The CEO has the discretion to make subordinate instruments that further define or extend the application of TCOs, although no such instruments are noted in this particular case.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0831550, as explained in the document, pertain to the application and approval process for Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods in question are not those specified in section 269SJ which are ineligible for tariff concessions. If the CEO finds that the application meets the core criteria set out in sections 269C, 269B, and 269D, they must make a written order, or TCO, as per subsection 269P(3). This instrument, TCO No. 0831550, made on 5 December 2008, declares that certain air cushion production machines are subject to the prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%.
The obligations imposed on the parties by this legislation are primarily on the CEO of Customs. Upon receiving a valid application for a TCO, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. The CEO must also ensure that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO is required to make the written TCO if the criteria are satisfied.
In terms of offences, penalties, or consequences for breach, the explanatory statement does not explicitly detail any specific penalties for failing to comply with the terms of the TCO. However, general compliance with the Customs Act 1901 can result in civil or criminal penalties, including fines and imprisonment, depending on the nature and severity of the breach. The Customs Act includes various sections that outline the potential penalties for non-compliance, which can include substantial fines and imprisonment for serious offences. In this particular case, the TCO itself does not impose any liabilities on any person and does not affect the rights of any person except to benefit the importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force.