EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0845340
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.
Cantarella Bros applied for a TCO in respect of certain coffee making machines parts on 30 December 2008.
Instrument
TCO No 0845340 was made on 24 April 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. 0845340 is taken to have come into force on 30 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 Tariff Concession Instrument No. 0845340, made under the Customs Act 1901, was introduced to address the problem of providing tariff concessions for specific goods that are not produced in Australia and thereby reducing the customs duty on these goods. This instrument was enacted in 2009 by the Chief Executive Officer of Customs (CEO) following an application from Cantarella Bros for tariff concessions on certain coffee making machine parts. The CEO determined that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in section 269C of the Act. The instrument specifies that the general rate of duty on these goods is 5%, but the rate for goods subject to the Tariff Concession Order (TCO) is free. The instrument was published in the Gazette, inviting submissions, though none were received. The TCO came into effect on the date the application was lodged, 30 December 2008, without affecting the rights of any person other than the Commonwealth, and it allows importers to apply for a refund of duty on goods imported since the TCO came into force.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. The Act applies to any person who may apply for a TCO in respect of goods, provided these goods are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The TCO mechanism is designed to benefit goods for which no substitutable products are produced in Australia in the ordinary course of business. The scope of the Act extends to the national level, providing a federal framework for tariff concessions. The geographic reach is nationwide, impacting entities and individuals involved in the importation of goods subject to TCOs. Exclusions are explicitly stated in section 269SJ of the Act, detailing goods that cannot be the subject of a TCO. The application of the Act may be extended or modified through subordinate instruments, but the primary legislation sets out the core criteria and process for making a TCO. The Act ensures that the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities for actions taken before the TCO's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0845340 under the Customs Act 1901 include sections 269C, 269F, 269P, and 269S, which outline the process for applying for a Tariff Concession Order (TCO) and the conditions that must be met for such an order to be granted. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria outlined in section 269C, which includes the absence of substitutable goods being produced in Australia at the time of the application, the CEO is required under section 269P(3) to make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a tariff concession.
Entities governed by this legislation have specific obligations and requirements. First, applicants for a TCO must ensure that their application meets the core criteria specified in the Customs Act. This involves demonstrating that no substitutable goods are being produced in Australia and that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties once a TCO application is accepted as valid, as required by subsection 269K(1) of the Act. Importers, in turn, have the right to apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.
The Act imposes certain consequences for breaches of its provisions. While the explanatory statement does not explicitly detail specific offences, penalties, or consequences for non-compliance with the TCO requirements, it is reasonable to infer that failure to adhere to the stipulated criteria for a TCO application could result in the CEO denying the application. Additionally, any misrepresentation or incorrect information provided in the application process could lead to administrative or legal repercussions. The precise penalties for such breaches would depend on the nature of the violation and could potentially involve fines or other administrative penalties as outlined in the relevant sections of the Customs Act and associated regulations.