EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0901776
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.
Conveyor Technologies Pty Ltd applied for a TCO in respect of certain rollers on 20 January 2009.
Instrument
TCO No 0901776 was made on 14 April 2009. It declares that those certain rollers 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. 0901776 is taken to have come into force on 20 January 2009.
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. 0901776, enacted in 2009, is an instrument under the Customs Act 1901, designed to provide relief from customs duties for specific goods. This instrument was introduced to address the need for tariff concessions for particular goods, ensuring they benefit from lower duty rates when no similar goods are produced domestically. The Tariff Concession Order (TCO) was made by the Chief Executive Officer of Customs, who determined that the application from Conveyor Technologies Pty Ltd for certain rollers met the criteria for concession, as no substitutable goods were produced in Australia. The legislation aims to provide a streamlined process for granting tariff concessions while ensuring that the rights of existing importers are protected, and no new liabilities are imposed on any person as a result of the concession.
The instrument was developed and enacted by the Australian Parliament, reflecting the policy objective to support specific industries by reducing the duty burden on certain imported goods. The TCO came into effect on the date the application was lodged, 20 January 2009, and allows for the importation of the specified rollers at a duty rate of free, down from the general rate of 5%. The CEO published a notice in the Gazette inviting any interested parties to submit objections, none of which were received, leading to the formal issuance of the TCO on 14 April 2009.
Scope and Application
The Customs Act 1901, specifically Part XVA, enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. This process is available to any person who applies for a TCO in respect of goods, provided the goods do not fall under the specific exclusions outlined in section 269SJ of the Act. An application for a TCO is deemed to meet the core criteria if, on the day it was lodged, there were no substitutable goods produced in Australia in the ordinary course of business. The CEO must then make a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a prescribed rate of duty, which may be free of charge. Once a TCO application is accepted as valid, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not proceed. In the case of TCO No. 0901776 concerning certain rollers, no submissions were received, leading to the effective date of the concession being set as the date of the application. This TCO does not affect any pre-existing rights or liabilities of non-Commonwealth entities, but it does benefit importers by potentially allowing them to apply for a refund of duty paid on the goods since the effective date of the TCO.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0901776 under the Customs Act 1901 (section 269P(3)) include the establishment of a lower rate of customs duty for certain goods specified in the instrument. Specifically, this instrument declares that certain rollers are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, which stipulates a duty rate of free, as opposed to the general rate of 5%. This tariff concession is contingent upon the Chief Executive Officer (CEO) of Customs being satisfied that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). The instrument came into force on the date the application was lodged, 20 January 2009 (subsection 269S(1)).
The obligations imposed by the Act on parties include the requirement for applicants to ensure that their applications meet the core criteria set out in section 269C, namely, that no substitutable goods are produced in Australia. The CEO, on the other hand, has the obligation to assess applications, make written orders if the criteria are met, and publish notices in the Gazette inviting submissions from interested parties (subsection 269K(1)). In this instance, the CEO was satisfied that no submissions were received, which suggests that no objections were raised against the concession.
Breach of the terms of the TCO or failure to comply with the Act's requirements could lead to various consequences. While the explanatory statement does not specify particular offences or penalties, breaches of customs laws generally can lead to civil or criminal penalties. Civil penalties can include fines up to the greater of $22,200 or three times the value of the goods involved in the breach, while criminal penalties can result in fines up to $275,000 and/or imprisonment for up to five years. The specific penalties would be determined by the courts based on the nature and severity of the breach.