EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904837
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.
John Holland applied for a TCO in respect of certain demoulding machine on 12 February 2009.
Instrument
TCO No 0904837 was made on 08 May 2009. It declares that those certain demoulding 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. 0904837 is taken to have come into force on 12 February 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. 0904837, enacted in 2009 under the Customs Act 1901, addresses the need for tariff concessions to support specific sectors by providing reduced customs duties on certain goods. This instrument was introduced to facilitate more competitive pricing for imported goods by reducing the financial burden on businesses that rely on importing these specific items. The instrument was enacted by the Australian Government and aims to support the economic activities of businesses by providing them with a tariff concession, as long as the goods are not being produced domestically and there are no substitutable goods available in Australia. The Tariff Concession Order (TCO) in question provides a zero-rate duty for certain demoulding machines, which benefits importers by potentially reducing their overall costs and making imported goods more competitive in the domestic market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce the customs duty on certain goods, provided the application meets the core criteria set out in the Act. The application process requires that no substitutable goods are produced in Australia at the time of application. Once the CEO is satisfied that the application meets these criteria, they must issue a written TCO, as was the case with TCO No. 0904837 for certain demoulding machines. This instrument was made effective from the date the application was lodged, that is, 12 February 2009. The TCO applies to the specific goods named in the order, and in this case, sets the duty rate at free, whereas the general rate is 5%. The TCO does not retroactively affect the rights of any person and does not impose liabilities on any individual or entity other than the Commonwealth. Importers of these goods will benefit from this concession, with the potential to apply for a refund of duty on imports since the effective date of the TCO.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0904837 are sections 269C, 269P, and 269S, which outline the conditions under which a Tariff Concession Order (TCO) can be made (section 269P(3)), and the circumstances under which it comes into effect (section 269S). Section 269C defines the core criteria for a TCO, stating that the application must meet specific conditions, including the absence of substitutable goods produced in Australia (section 269C). Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to issue a written TCO if the application meets these criteria, and section 269S specifies that the TCO is effective from the date the application was lodged.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to assess the validity of TCO applications based on the criteria set out in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). Furthermore, the CEO must ensure that any TCO made does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO comes into force (section 269S(1)). The Act also requires that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
The Act outlines specific consequences for breaches of its provisions. While the explanatory statement does not detail specific offences or penalties, it is understood that any failure to comply with the requirements set out in the Act, such as improper application processes or incorrect imposition of liabilities, could potentially lead to legal action. The severity of such consequences would depend on the nature of the breach and the specific provisions of the Customs Act 1901 and related regulations. It is advisable for any party involved to adhere strictly to the legislative requirements to avoid any adverse outcomes.