EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0838135
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.
Lisec Australia Pty Ltd applied for a TCO in respect of certain glass sheet handling equipment on 03 November 2008.
Instrument
TCO No 0838135 was made on 23 January 2009. It declares that those certain glass sheet handling equipment 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. 0838135 is taken to have come into force on 03 November 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. 0838135, made under the Customs Act 1901, was enacted in 2009 to address the need for tariff concessions on specific goods that are not produced in Australia, thereby encouraging import and reducing costs for businesses. This instrument was introduced to facilitate the application process for tariff concessions, ensuring that businesses could benefit from reduced customs duties on goods that are not domestically produced. The Customs Act 1901 allows the Chief Executive Officer of Customs to make such tariff concession orders if the application meets the core criteria, which include the absence of substitutable goods produced in Australia. The instrument was enacted by the relevant authority within the Australian Government and its policy objective is to streamline the tariff concession process, providing economic benefits to businesses by lowering the cost of imported goods that are not manufactured locally.
Scope and Application
The Tariff Concession Instrument No. 0838135 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain glass sheet handling equipment, as identified in the application submitted by Lisec Australia Pty Ltd on 3 November 2008. This Act allows for the concession of tariff duties on goods under specific conditions, which in this case were met as no substitutable goods were produced in Australia in the ordinary course of business. The instrument, made on 23 January 2009, is effective from the date the application was lodged, aligning with the legislative provision that a Tariff Concession Order (TCO) is deemed to come into force on the day the application is made. The geographic reach of this legislation is national, applying across Australia as it is a Commonwealth Act.
Exclusions and exemptions are stipulated in section 269SJ of the Customs Act 1901, which details the types of goods that cannot be subject to a TCO. The application of the Act is further detailed through subordinate instruments, which may extend or restrict the application based on specific criteria and conditions. Importantly, the TCO does not affect the rights of any person other than the Commonwealth, ensuring that no disadvantage or liability is imposed on any party in respect of actions taken before the TCO was registered. The rights of importers, however, are positively affected, as they can apply for a refund of duty on goods imported from the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0838135, under the Customs Act 1901, include sections 269C, 269F, 269P, and 269S, among others. Section 269F (1) permits an individual to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C (1) mandates the CEO to consider the application, ensuring it meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO determines the application meets these criteria, Section 269P (3) requires the CEO to issue a written order, a TCO, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively reducing or eliminating customs duty on the goods in question.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that the application for a TCO complies with the conditions set out in Section 269F and that the application is not in respect of goods specified in Section 269SJ, which lists those goods that cannot be subject to a TCO. Additionally, under Section 269K (1), the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting submissions from any person who believes the TCO should not be made. These obligations are crucial to maintaining transparency and fairness in the application process.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly detail penalties for failing to comply with the TCO provisions. However, the consequences for non-compliance with the Customs Act 1901 in general can be severe. For instance, under Section 172 of the Act, the CEO can impose penalties for contraventions, which can include fines of up to $22,200 for individuals and $111,000 for corporations, depending on the severity of the offence. Additionally, criminal penalties may apply, with imprisonment terms varying based on the breach's nature and the offender's status. It is important to note that failure to adhere to the requirements set forth in the Customs Act 1901 can lead to significant legal and financial repercussions.