EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0845406
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.
Bucher Vaslin Australia applied for a TCO in respect of certain cross flow filtration machine on 30 December 2008.
Instrument
TCO No 0845406 was made on 27 March 2009. It declares that those certain cross flow filtration 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. 0845406 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, including the imposition of customs duty on imported goods. The Act established a framework for granting tariff concessions, as seen in Part XVA, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce the customs duty on specified goods. The objective of this legislative framework is to ensure that tariff concessions are granted fairly and transparently, taking into account the economic implications for both domestic producers and importers. The instrument F2009L01403, made under this Act, provides tariff concession for certain cross flow filtration machines, effective from the date the application was lodged, 30 December 2008. This concession was granted as no substitutable goods were produced in Australia at the time, aligning with the core criteria outlined in the Act.
Scope and Application
The Customs Act 1901, under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO), applies to any person or entity seeking tariff concessions on goods imported into Australia. This Act provides a mechanism for granting reduced customs duty rates on specific goods, contingent upon the absence of substitutable goods produced in Australia. The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and the application of customs duties at the federal level. TCO No. 0845406, for instance, pertains to certain cross flow filtration machines, which are granted a duty-free status as of the date the application was lodged, 30 December 2008. The Act allows for the CEO to extend or restrict the application through subordinate instruments, which can include regulations and other legislative measures that provide further detail on the application of the primary legislation. Any exclusions or exemptions would be clearly outlined within the primary Act or any subordinate legislation, ensuring that the scope and limitations of the concessions are well understood by applicants and other stakeholders.
Key Provisions
The Tariff Concession Instrument No. 0845406 (the Instrument) under the Customs Act 1901 establishes a concession for certain cross flow filtration machines, as applied for by Bucher Vaslin Australia. According to section 269F, a person may apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning these goods, provided the application does not relate to goods specified in section 269SJ, which are ineligible for TCOs. If the CEO determines that the application meets the core criteria outlined in section 269C, they must issue a written TCO. This means that the CEO must satisfy themselves that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. For this purpose, 'substitutable goods' are defined in section 269D as goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put.
The CEO, after verifying the application against the core criteria, issued TCO No. 0845406 on 27 March 2009, declaring that the specified cross flow filtration machines are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. The general rate of duty on these goods is 5%, but the TCO reduces this to free. This tariff concession applies from 30 December 2008, the date the TCO application was lodged, as per subsection 269S(1). The CEO is also required, under subsection 269K(1), to publish a notice in the Gazette inviting submissions from any interested parties who believe there are reasons why the TCO should not be made. No submissions were received in response to this notice.
The Instrument imposes specific obligations on the parties involved. The CEO must ensure that applications for TCOs meet the criteria outlined in sections 269C and 269SJ of the Customs Act 1901. They must also publish notices in the Gazette inviting submissions from interested parties, as mandated by subsection 269K(1). The CEO’s role is pivotal in assessing applications and making orders that comply with the statutory requirements. Importers of the specified goods benefit from the concession by being able to apply for a refund of duty on goods imported since the TCO came into effect, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901, including the provisions for making TCOs, could result in legal consequences. The Act does not specify particular offences or penalties for breaches related to TCOs, but general contraventions of the Customs Act can attract penalties under other sections of the Act. These penalties may include fines or imprisonment, depending on the severity of the breach. Additionally, there may be civil or administrative penalties for incorrect claims or fraudulent activities related to customs duty concessions.