EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836600
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.
Esj Grafix Services Pty Ltd applied for a TCO in respect of certain powder sprayers on 23 October 2008.
Instrument
TCO No 0836600 was made on 16 January 2009. It declares that those certain powder sprayers 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. 0836600 is taken to have come into force on 23 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, was updated to include the provision for Tariff Concession Orders (TCOs) through the insertion of Part XVA. This legislative change aimed to address the need for a streamlined process to provide tariff concessions on certain imported goods under specific conditions, thereby facilitating trade by lowering the customs duty rates for these goods. The Tariff Concession Instrument No. 0836600, issued under this framework, illustrates the practical application of this provision, as seen in the case of Esj Grafix Services Pty Ltd, which successfully applied for a TCO for certain powder sprayers, resulting in the duty on these goods being set at free. The process involves a rigorous evaluation by the Chief Executive Officer of Customs, ensuring that the concession is granted only when there are no substitutable goods produced in Australia, thereby maintaining a balance between supporting local production and promoting competitive import pricing.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0836600, provides a mechanism for the Chief Executive Officer of Customs to reduce or eliminate customs duty on specific goods, facilitating trade by lowering the cost of importing these items. This instrument specifically applies to the importation of certain powder sprayers, as declared in the instrument, which now enjoy a free rate of duty instead of the general rate of 5%. The instrument is applicable to any entity or person importing these goods into Australia, and it extends across the entire Commonwealth. The application of the tariff concession hinges on the core criteria outlined in the Act, ensuring that the imported goods do not have Australian-made alternatives. Additionally, the instrument does not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth, and it allows for potential duty refunds for importers of these goods since the date the TCO was deemed to have come into force.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901, which establish the framework for Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning goods. If the application meets certain criteria, the CEO must make a written order that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). Section 269C specifies 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.
The obligations imposed by this legislation include the requirement for the CEO to consider applications for TCOs and determine whether they meet the core criteria (section 269F). The CEO must also ensure that a TCO application does not relate to goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO. The CEO must make a TCO if the application satisfies the criteria in section 269C. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)).
There are no specific offences, penalties, or civil or criminal consequences for breach outlined in the text of the legislation itself. However, the Customs Act 1901 and the Customs Regulations 1996, which provide the broader legal framework, do include provisions for penalties and enforcement actions. These may include fines and imprisonment for offences such as fraudulent claims, false statements, and failure to comply with the Act. The maximum penalties will depend on the nature and severity of the offence, as outlined in the relevant sections of the Customs Act 1901 and the Customs Regulations 1996. The Act also provides for the recovery of duties and taxes owed, as well as the imposition of administrative penalties for breaches of the Act or Regulations.