EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0838256
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 applied for a TCO in respect of certain desiccant filling machines on 03 November 2008.
Instrument
TCO No 0838256 was made on 23 January 2009. It declares that those certain desiccant filling machines 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. 0838256 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. 0838256, enacted in 2009, is an instrument made under the Customs Act 1901, designed to address the issue of applying tariff concessions on specific goods, in this case, certain desiccant filling machines. This instrument was introduced to provide relief to importers of these goods by granting them a tariff concession order (TCO) which reduces the duty from the general rate of 5% to free duty. The enacting body for this legislation is the Chief Executive Officer of Customs, who must be satisfied that the application meets the core criteria, such as the absence of substitutable goods produced in Australia, before issuing the TCO. The policy objective is to facilitate the import of goods that are not locally produced, thereby potentially lowering costs and improving market access for Australian businesses. The instrument came into force on the date the application was lodged, and it does not disadvantage any person other than the Commonwealth or impose any liabilities on any person.
Scope and Application
The Customs Act 1901, under which the Tariff Concession Instrument No. 0838256 operates, applies to any person or entity seeking to import goods into Australia, provided those goods are not specified in section 269SJ of the Act as ineligible for tariff concessions. The Act, administered by the Chief Executive Officer of Customs, mandates that a Tariff Concession Order (TCO) may be applied for by any individual or organisation seeking a reduction in the customs duty on specific goods. The application process involves ensuring that the goods in question do not have substitutable alternatives produced in Australia, thereby meeting the core criteria as outlined in sections 269C, 269B, and 269D of the Act. Once the CEO determines that the application meets these criteria, a TCO is issued, specifying the reduced rate of duty applicable to the imported goods. This instrument has a national jurisdictional reach and applies to all states and territories within Australia. The TCO does not impose any disadvantages or liabilities on persons other than the Commonwealth and does not affect rights accrued before its effective date.
Key Provisions
The primary operative sections of this legislation, specifically sections 269F, 269C, 269B, and 269P(3) of the Customs Act 1901, establish a framework for the creation of Tariff Concession Orders (TCOs). Section 269F enables a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO determines that the application is valid and meets the core criteria, which includes an assessment of whether substitutable goods are produced in Australia (section 269C), the CEO is required to issue a written TCO (section 269P(3)). This order declares that the specified goods are subject to a reduced rate of customs duty, as outlined in Schedule 4 of the Customs Tariff Act 1995.
The Customs Act imposes several obligations on both the applicant and the CEO. For the applicant, the key requirement is to submit a valid application to the CEO for a TCO. This application must be made in good faith and include all necessary information to demonstrate that the goods in question meet the criteria for a concession. The CEO, on the other hand, has the responsibility to evaluate the application, determine if it meets the core criteria, and if satisfied, to issue the TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or submissions if they believe the TCO should not proceed. In the case of TCO No. 0838256, the CEO did not receive any submissions in response to the published notice.
Breaching the obligations and requirements set out in the Customs Act can result in various penalties and consequences. While the Act does not explicitly detail the penalties for non-compliance in this specific context, general provisions under the Customs Act may include fines, imprisonment, or both for offences related to customs duties. For instance, section 226 of the Act provides that a person who contravenes any provision of the Act may be liable to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, depending on the severity of the offence. Additionally, section 269S(1) ensures that the TCO does not affect the rights of any person as at the date of registration, thereby preventing any adverse consequences for those who have already imported goods before the TCO was issued.