EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0842570
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.
Tiger Coffee Pty Ltd applied for a TCO in respect of certain coffee making machines parts on 4 December 2008.
Instrument
TCO No 0842570 was made on 27 February 2009. It declares that those certain coffee making machines parts 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. 0842570 is taken to have come into force on 4 December 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 Parliament of Australia, established a framework for the imposition of customs duties on imported goods. It provides for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce or eliminate customs duties on certain goods under specific circumstances. The Tariff Concession Instrument No. 0842570 was introduced to address the need for tariff concessions for goods that are not produced domestically and for which there are no substitutable goods in Australia. This particular instrument was made in response to an application by Tiger Coffee Pty Ltd for tariff concessions on certain coffee making machine parts. The policy objective is to facilitate the import of goods that are not produced locally, thereby supporting industries and consumers by potentially lowering the cost of these imported items. The instrument took effect from the date the application was lodged, ensuring that the rights of importers are protected and can benefit from the tariff concessions.
Scope and Application
The Customs Act 1901 applies to the process of applying for and granting Tariff Concession Orders (TCOs) as outlined in Part XVA, which allows for the reduction of customs duty on specified goods. Specifically, this Act governs who can apply for a TCO, the criteria that must be met for the concession to be granted, and the process by which the Chief Executive Officer of Customs makes these determinations. This process is triggered when an entity, such as Tiger Coffee Pty Ltd, submits an application for tariff concessions on goods that are not produced in Australia in the ordinary course of business. Once an application is accepted as valid and no objections are raised, the CEO must issue a TCO that specifies the goods and the reduced duty rate, as demonstrated in TCO No. 0842570 for certain coffee making machine parts. The Act ensures that the rights of non-Commonwealth persons are not adversely affected by the issuance of a TCO, and it outlines the commencement date of the concession as the date the application was lodged. The scope of this legislation is national, affecting importers and exporters across Australia, while its application is extended through subordinate instruments such as the Customs Tariff Act 1995 and the Customs Regulations 1999.
Key Provisions
The Tariff Concession Order No. 0842570, established under the Customs Act 1901 (the Act), pertains to the tariff concessions applied to certain coffee making machine parts (s 269C). Specifically, the order was made on 27 February 2009 and declares that the particular coffee making machine parts are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995 (the Tariff), resulting in a free rate of duty, as opposed to the general rate of 5% (s 269P(3)). This order came into effect on 4 December 2008, the date the application for the tariff concession was lodged (s 269S(1)).
The Act imposes several obligations on the parties involved. For instance, it requires that an application for a Tariff Concession Order (TCO) must not be in respect of goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. Additionally, the Chief Executive Officer of Customs (CEO) must determine whether the application meets the core criteria, which includes assessing whether any substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods subject to the TCO (s 269P(3)). Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made (s 269K(1)).
Under the Customs Act 1901, the CEO must ensure that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration in a way that would disadvantage that person or impose liabilities on them in respect of anything done or omitted before the date of registration (s 269S(2)). The rights of importers will be beneficially affected by this TCO, as they can apply for a refund of duty on goods imported since the TCO came into force (Regulations, para 126(1)(r)). Importantly, the TCO does not impose any liabilities on any person.
Failure to comply with the provisions of the Customs Act 1901 or the regulations could lead to various consequences. While the explanatory statement does not specify particular offences or penalties, breaches of the Customs Act 1901 generally could result in both civil and criminal penalties. Civil penalties might include fines, whereas criminal penalties could include imprisonment, depending on the severity and nature of the breach. However, the maximum penalties are not explicitly stated in the provided text, and further reference to the Act and relevant regulations would be necessary to determine specific penalties for non-compliance.