EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833811
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.
Enerka Apex Belting Pty Ltd applied for a TCO in respect of certain rubber mill on 02 October 2008.
Instrument
TCO No 0833811 was made on 19 December 2008. It declares that those certain rubber mill 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. 0833811 is taken to have come into force on 02 October 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, establishes a framework for the regulation of customs and excise within Australia. Part XVA of this Act introduces a scheme allowing the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on certain goods. This mechanism was introduced to address the gap in providing tariff relief on goods for which no substitutable domestic product exists, thereby supporting Australian industries and consumers by potentially reducing the cost of imported goods. Instrument No. 0833811, made under the authority of this Act, provides a tariff concession for certain rubber mill, effective from the date the application was lodged, 2 October 2008. This concession aims to ensure that the rights of importers are positively affected, allowing them to apply for duty refunds on imports of these goods from the commencement date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0833811, under Part XVA of the Customs Act 1901, applies to goods for which Enerka Apex Belting Pty Ltd has applied and obtained a Tariff Concession Order (TCO). This instrument is specifically tailored for the goods in question, namely certain rubber mills, which are now eligible for a concessional rate of duty as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO, which came into force on the date the application was lodged, 02 October 2008, ensures that the general duty rate of 5% is reduced to free for these specific goods, provided that no substitutable goods are produced in Australia. The application process and subsequent order hinge on the Chief Executive Officer of Customs being satisfied that the application meets the core criteria set out in the Customs Act. The TCO does not impact any existing rights or impose new liabilities on individuals or entities other than the Commonwealth, thereby safeguarding the interests of those importing the goods and potentially entitling them to a refund of duty paid prior to the TCO's effective date.
Key Provisions
The Customs Act 1901, under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Specifically, Section 269F allows a person to apply to the CEO for a TCO concerning certain goods. If the application does not pertain to goods specified in Section 269SJ, which lists those goods that cannot be subject to a TCO, the CEO must determine if the application meets the core criteria outlined in Section 269C. This section stipulates that an application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B clarifies that "goods produced in Australia" means goods manufactured domestically, "ordinary course of business" refers to the usual practices of business operations, and "substitutable goods" are those that can replace or be interchanged with the goods in question for their intended use or design.
Under Section 269P(3), if the CEO is satisfied that an application meets the core criteria, they are required to issue a written order, a TCO, specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. This order effectively reduces the customs duty on these goods. In the case of Enerka Apex Belting Pty Ltd, a TCO was issued on 19 December 2008, declaring that certain rubber mills are subject to item 50 of the Tariff, with a resulting duty rate of free, as opposed to the general rate of 5%.
The obligations imposed by the Act on the CEO include accepting a TCO application as valid, publishing a notice in the Gazette inviting any interested parties to submit objections, and making a decision based on whether the application meets the core criteria. If the CEO is satisfied that the application meets these criteria, they must issue a TCO. The CEO is also required to ensure that the TCO does not affect the rights of any person adversely as at the date of registration. The TCO No. 0833811 came into force on 2 October 2008, the date the application was lodged, as per Subsection 269S(1). Importantly, the TCO does not impose any liabilities on any person and does not disadvantage anyone except the Commonwealth.
In terms of breaches and penalties, the Customs Act does not explicitly detail the offences or penalties for non-compliance with a TCO or its requirements. However, general provisions within the Customs Act and related legislation may apply, where violations could lead to criminal or civil penalties. For instance, misleading or providing false information in the TCO application could potentially lead to criminal charges under the Crimes Act 1914, with penalties that include fines or imprisonment. Similarly, civil penalties for non-compliance or breaches of the terms of the TCO may also apply, as outlined in the relevant sections of the Customs Act and associated regulations.