EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0845401
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.
Vita gold products applied for a TCO in respect of certain tablet / capsule counter and filler machine on 30 December 2008.
Instrument
TCO No 0845401 was made on 20 March 2009. It declares that those certain tablet / capsule counter and filler 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. 0845401 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for the regulation of customs duties and tariffs, including provisions for Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0845401 was introduced to address the specific needs of businesses seeking to import certain goods without incurring the standard customs duties. The instrument was designed to alleviate the financial burden on importers of goods that cannot be substituted by domestically produced alternatives, thus encouraging trade and economic activity by making imported goods more competitively priced. The instrument was effective from the date of the application, ensuring that no adverse effects were imposed on parties prior to the concession's implementation.
Scope and Application
The Customs Act 1901 applies to any person or entity involved in the importation of goods into Australia, with a particular focus on those seeking tariff concession orders for specific goods. The Act empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which lower the rate of customs duty on particular goods, provided that the application meets the core criteria outlined in the Act. These criteria include the absence of substitutable goods produced in Australia in the ordinary course of business. The Act’s application extends across the Commonwealth of Australia, and it does not impose any liabilities on individuals or entities for actions taken prior to the registration of the TCO. Notably, the Act excludes certain goods from being subject to a TCO, as specified in section 269SJ. Any exclusions, exemptions, or thresholds are further detailed in subordinate instruments, which may provide additional clarification or specific conditions for the application of the Act.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (s 269F). These orders apply a lower rate of customs duty to the goods specified in the order. For instance, a TCO application may be submitted by a person to the CEO for goods, and if the application is not for goods specified in section 269SJ, which lists goods ineligible for a TCO, the CEO must then determine if the application meets the core criteria (s 269C). The core criteria are satisfied if, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business (s 269C, s 269D, s 269E).
The Act imposes specific obligations on the CEO regarding the handling of TCO applications. Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any person who might oppose the TCO to submit their reasons (s 269K(1)). If no objections are received, the CEO must proceed to make the TCO if the application meets the core criteria. Additionally, the TCO is effective from the date the application was lodged (s 269S(1)). The Act also stipulates that the TCO should not disadvantage any person or impose liabilities on them for actions taken before the TCO's effective date, except for the Commonwealth (s 269T).
Breaches of the provisions in the Customs Act 1901 can result in both civil and criminal penalties. For instance, penalties may include fines and imprisonment for offences such as fraudulent conduct, which can be severe depending on the nature and extent of the offence. Specifically, under the Customs Act, penalties for serious breaches can extend up to 10,000 penalty units or imprisonment for five years, or both, for corporate entities, while individuals can face higher penalties of up to 20,000 penalty units or imprisonment for ten years, or both, for more egregious violations (s 275, s 276). These penalties underscore the importance of compliance with the Act's provisions.