EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831997
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.
Tapex Pty Ltd applied for a TCO in respect of certain thermal decomposing cleaning systems on 22 September 2008.
Instrument
TCO No 0831997 was made on 12 December 2008. It declares that those certain thermal decomposing cleaning systems 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. 0831997 is taken to have come into force on 22 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 Australian Parliament, provides a framework for the imposition of customs duty on imported goods. Within this legislative structure, Part XVA introduces the scheme for Tariff Concession Orders (TCOs), which allows for the application of a lower rate of customs duty on certain goods. The Act was designed to address the need for tariff concessions to support industries where local production is not viable or where imported goods provide significant benefits. The Tariff Concession Instrument No. 0831997 was introduced to facilitate the application of Tapex Pty Ltd for a tariff concession on certain thermal decomposing cleaning systems. This concession was granted by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thus meeting the core criteria outlined in the Act. The instrument came into force on the date the application was lodged, ensuring that the rights of importers are positively affected while imposing no new liabilities.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a scheme for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods and reduce the customs duty rate to zero, provided the CEO is satisfied that the goods meet the core criteria set out in section 269C of the Act. This includes ensuring that no substitutable goods are produced in Australia on the day the application was lodged, as defined in sections 269D and 269E of the Act. The application process also involves publishing a notice in the Gazette to allow for submissions from interested parties, although no submissions were received in relation to TCO No. 0831997. This particular TCO applies to certain thermal decomposing cleaning systems, declared to be free of duty as of 22 September 2008, the date the application was lodged. The TCO does not adversely affect any rights or impose liabilities on anyone other than the Commonwealth for actions taken before its registration, while importers of the affected goods may apply for a duty refund under the Regulations.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0831997 under the Customs Act 1901 include sections 269C (269P(3)), 269B, and 269D, which establish the criteria for the Chief Executive Officer (CEO) of Customs to consider when deciding whether to grant a Tariff Concession Order (TCO) for certain goods. Specifically, section 269C outlines the core criteria that must be met, ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Section 269B provides definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', which are crucial for determining eligibility for a TCO. Section 269D further defines what constitutes 'goods produced in Australia', which is integral to the assessment process. Once the CEO is satisfied that the application meets these criteria, they must issue a TCO, as specified in section 269P(3).
The Act imposes several obligations on both the CEO and the applicants for a TCO. For the CEO, the obligations include accepting and evaluating TCO applications, ensuring that the application meets the core criteria, and making a written TCO if the criteria are satisfied. The CEO must also publish a notice in the Gazette inviting any objections to the proposed TCO, as mandated by subsection 269K(1). For the applicants, the obligations include lodging a valid application that meets the core criteria, providing all necessary documentation and information to support their application, and responding to any requests for additional information from the CEO. Failure to comply with these obligations can result in the application being rejected.
There are no specific offences, penalties, or civil/criminal consequences outlined in the text for breaches related to the TCO process. However, the Customs Act 1901 and associated regulations generally provide for penalties for non-compliance with customs laws. These may include fines and potential criminal charges for more serious breaches. For example, under the Customs Act, penalties for making false statements or providing false information can result in fines of up to $22,200 for individuals and $111,000 for corporations, as well as imprisonment for up to two years. The specifics of penalties would depend on the nature and severity of the breach, as well as any relevant provisions in the Customs Tariff Act 1995 and other related legislation.