EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844695
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.
Brandown Pty Ltd applied for a TCO in respect of certain waste and recyclable screening machine on 19 December 2008.
Instrument
TCO No 0844695 was made on 13 March 2009. It declares that those certain waste and recyclable screening machine 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. 0844695 is taken to have come into force on 19 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, provides a framework for the regulation of customs and excise, including the imposition of tariffs on imported goods. This Act allows for the creation of Tariff Concession Orders (TCOs), which grant tariff concessions on certain goods, effectively reducing or eliminating the customs duty payable on those goods. The Tariff Concession Instrument No. 0844695, issued in 2009, aims to address the need for tariff concessions on specific goods, in this case, certain waste and recyclable screening machines, by establishing a lower rate of customs duty for these items. The policy objective is to facilitate the importation of these goods by reducing the financial burden on importers, thereby potentially encouraging the use of these machines in Australia and supporting environmental sustainability efforts.
The instrument was enacted following an application by Brandown Pty Ltd, and after determining that no substitutable goods were produced in Australia, the Chief Executive Officer of Customs made a written order declaring that the specified waste and recyclable screening machines would be subject to a prescribed tariff item with a duty rate of free, as opposed to the general rate of 5%. The order came into effect on the date the application was lodged, 19 December 2008, and does not disadvantage any person or impose liabilities on anyone for actions taken before the registration date. The decision to grant the concession was made without any submissions opposing the order, indicating broad acceptance of the application's merits.
Scope and Application
The Tariff Concession Instrument No. 0844695 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, namely certain waste and recyclable screening machines. The instrument was enacted to facilitate the application process for tariff concessions by the Chief Executive Officer of Customs (CEO) when the application criteria are met, such as the absence of substitutable goods produced in Australia. The application and subsequent concession apply on the date the application was lodged, with no retrospective effect on existing rights or liabilities, except to benefit importers by potentially entitling them to a refund of duties paid on the goods since the concession's effective date. Geographically, the Act operates within the Commonwealth of Australia, and the concession applies nationally. The CEO has discretion to make these concessions if certain conditions are satisfied, as outlined in the Act, and these decisions can be further governed by subordinate instruments. Notably, the instrument excludes certain goods specified under section 269SJ of the Customs Act 1901, which cannot be subject to a tariff concession order.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0844695, introduces provisions for Tariff Concession Orders (TCOs) which allow for a reduced rate of customs duty on certain goods. Section 269F of the Act allows individuals to apply to the Chief Executive Officer (CEO) of Customs for a TCO for specified goods, provided those goods are not excluded by section 269SJ. For the CEO to grant such an order, the application must meet core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged. Definitions of key terms such as "substitutable goods" and "ordinary course of business" are provided in sections 269D and 269E respectively.
Entities and individuals applying for a TCO must ensure that their applications comply with the stipulated criteria, which involves demonstrating that no suitable Australian-made alternatives exist for the goods in question. The CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties who might object to the making of the TCO. This ensures a level of transparency and opportunity for public input in the decision-making process. Once a TCO is made, it is effective from the date the application was lodged, as per subsection 269S(1), and it does not adversely affect any rights or impose liabilities on persons other than the Commonwealth for actions taken prior to the order's registration.
Breach of the conditions set out in the TCO could lead to legal consequences. While the Act does not explicitly detail specific penalties for non-compliance, general provisions under the Customs Act may apply. These could include fines or other penalties for non-compliance with customs regulations. Additionally, if an entity deliberately misclassifies goods to take advantage of the TCO, they might face more severe penalties under other sections of the Customs Act or related legislation, potentially including criminal charges.
In summary, the Tariff Concession Instrument No. 0844695 provides a framework for granting reduced customs duty rates on certain imported goods, subject to strict criteria and public consultation. It outlines the obligations for applicants and the CEO, as well as the effective date of the concession. While the specific penalties for non-compliance are not detailed within this particular instrument, the overarching Customs Act provides a basis for enforcement actions against breaches.