EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836866
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.
Thyssenkrupp Steelcom Pty Ltd applied for a TCO in respect of certain wet speed mixer on 24 October 2008.
Instrument
TCO No 0836866 was made on 16 January 2009. It declares that those certain wet speed mixer 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. 0836866 is taken to have come into force on 24 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 Tariff Concession Instrument No. 0836866, enacted in 2009, is an instrument under the Customs Act 1901, designed to address the need for specific tariff concessions for particular goods. The Customs Act 1901, as amended, allows for the Chief Executive Officer of Customs to make Tariff Concession Orders that provide for lower rates of customs duty on goods specified in such orders. The primary policy objective of this legislation is to facilitate the import of certain goods by reducing their customs duty, thereby making them more affordable and accessible. In this specific instance, the instrument was introduced in response to an application by Thyssenkrupp Steelcom Pty Ltd for tariff concessions on certain wet speed mixers. The instrument declares that these mixers are subject to a free rate of duty, down from the general rate of 5%, recognising that no substitutable goods were produced in Australia. The enactment of this instrument ensures that the rights of importers are protected and potentially benefited, without imposing any new liabilities or disadvantaging any party as of the date of registration.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity that seeks to import goods eligible for tariff concessions, provided the goods do not fall under the restricted list specified in section 269SJ. The application process involves satisfying core criteria outlined in sections 269C and 269F, ensuring that no substitutable goods are produced in Australia as per section 269D. The scope of the Act is national, covering all territories within Australia, and it extends its application through subordinate instruments such as the Customs Tariff Act 1995. The instrument in question, TCO No. 0836866, pertains to certain wet speed mixers and was published in the Gazette, inviting submissions that did not eventuate. This TCO came into effect on 24 October 2008, the date of application, and it does not disadvantage any persons or impose liabilities on anyone in respect of actions taken prior to its registration. Importers benefit from this TCO by potentially applying for a refund of duty on goods imported since the effective date.
Key Provisions
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs, as detailed in section 269F. Section 269C stipulates that a TCO application meets the core criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. This means that for the CEO to consider an application for a TCO, there must be no goods in Australia that could replace the ones being sought for tariff concession, and these goods must be produced as part of regular business activities.
To further understand the core criteria, section 269B defines "goods produced in Australia" as per section 269D, "ordinary course of business" as per section 269E, and "substitutable goods" as per section 269D. Essentially, if a TCO application is for goods that are not being produced in Australia and no suitable alternatives exist, the CEO must proceed with making a written TCO. Once a TCO is made, the goods specified in the order are subject to a lower customs duty rate, as stated in the relevant item of Schedule 4 to the Customs Tariff Act 1995.
The obligations under the Act require that the CEO must, upon receiving a valid TCO application, publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made. If no submissions are received, the CEO proceeds with the order. Additionally, under section 269S(1), a TCO is deemed to come into force on the day the application is lodged. This means that the tariff concession becomes effective immediately upon the application date, as seen in TCO No. 0836866 which was applied for on 24 October 2008 and came into force on the same day.
The consequences for non-compliance or breach of the provisions under the Customs Act 1901 are not explicitly detailed in the provided text, but typically, breaches of customs regulations can result in significant penalties. These may include financial penalties, confiscation of goods, or in severe cases, criminal charges. The specific penalties would be outlined in the Customs Act and related regulations, which are not provided in the explanatory statement. Nonetheless, it is clear that adherence to the legislative requirements is crucial for entities seeking tariff concessions, and any failure to comply could lead to serious legal repercussions.