EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844983
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.
Clyde Bergemann applied for a TCO in respect of certain dry coarse pneumatic conveyor system parts on 23 December 2008.
Instrument
TCO No 0844983 was made on 20 March 2009. It declares that those certain dry coarse pneumatic conveyor system 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. 0844983 is taken to have come into force on 23 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 Australian Parliament, provides a framework for the regulation of customs and excise, including the ability to grant tariff concessions. This legislative scheme aims to support the efficient flow of trade by reducing customs duty on certain goods, thereby encouraging their importation and use within Australia. Tariff Concession Orders (TCOs) are a mechanism by which the Chief Executive Officer of Customs can reduce or eliminate customs duty on specified goods, provided certain criteria are met. The Explanatory Statement for Tariff Concession Instrument No. 0844983, issued in 2009, outlines the process and rationale behind granting a TCO to Clyde Bergemann for specific dry coarse pneumatic conveyor system parts, effective from 23 December 2008. The policy objective is to facilitate the import of these goods by making them duty-free, thereby potentially lowering costs for businesses and consumers and promoting economic activity.
Scope and Application
The Tariff Concession Instrument No. 0844983, as made under Part XVA of the Customs Act 1901, applies to specific goods, namely certain dry coarse pneumatic conveyor system parts, and is designed to provide a tariff concession by reducing the duty on these goods from 5% to free. This instrument is applicable to any entity or person involved in the importation of these goods, effectively reducing the financial burden on importers of these specific items. The instrument's jurisdiction spans the Commonwealth of Australia, extending its reach to all importers within the country. It is important to note that the application of this TCO is contingent upon the absence of substitutable goods produced in Australia on the date the application was lodged, as per the criteria set out in section 269C of the Act. The application process also mandates that the CEO must publish a notice in the Gazette to invite any objections, although in this instance, no submissions were received. The commencement of this TCO is retroactive to the date the application was lodged, ensuring that importers can potentially claim refunds for duties paid on goods imported since 23 December 2008. This instrument does not affect any existing rights of persons other than the Commonwealth or impose any new liabilities.
Key Provisions
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows a person to apply to the CEO for a TCO concerning specific goods, provided they do not fall under the categories outlined in section 269SJ, which lists goods ineligible for TCOs. Once the application is deemed valid, the CEO assesses whether it meets the core criteria specified in section 269C, which require that no substitutable goods were produced in Australia on the day the application was lodged. The definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are given in sections 269D, 269E, and 269F respectively. If these criteria are met, the CEO is mandated by section 269P(3) to issue a TCO, declaring the goods in question are subject to a specified tariff item in Schedule 4 of the Customs Tariff Act 1995.
Under this legislative framework, the CEO's obligations include accepting valid applications, assessing them against the core criteria, and making an order if the criteria are satisfied. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be made. In the case of TCO No. 0844983, concerning certain dry coarse pneumatic conveyor system parts, the CEO accepted Clyde Bergemann's application and published a notice in the Gazette, but did not receive any objections. Consequently, a TCO was issued on 20 March 2009, declaring that these parts are subject to a free duty rate under item 50 of Schedule 4 of the Tariff, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. The applicant must ensure their application meets all statutory requirements and provides accurate information. The CEO is responsible for verifying the application's validity, assessing it against the core criteria, and publishing a notice in the Gazette to allow for any objections. Importers of the affected goods are granted the right to apply for a refund of duty paid on imports since the TCO's effective date, as stipulated under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not disadvantage any person or impose liabilities on them for actions taken prior to the TCO's effective date.
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO may lead to various consequences. While specific offences and penalties are not detailed in the provided text, breaches of customs laws generally may result in civil or criminal penalties. Civil penalties could include fines or monetary compensation, while criminal penalties might involve imprisonment or fines, depending on the severity of the breach. The exact penalties would be determined by the relevant provisions of the Customs Act 1901 and other applicable laws.