EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910405
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.
Enviroaer Industries Pty Ltd applied for a TCO in respect of certain washing presses on 27 March 2009.
Instrument
TCO No 0910405 was made on 12 June 2009. It declares that those certain washing presses 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. 0910405 is taken to have come into force on 27 March 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 Customs Act 1901, enacted by the Commonwealth Parliament, establishes a framework for the administration of customs duties, including the imposition of tariff concession orders (TCOs) to provide relief on certain goods. The Act was introduced to address the need for flexible tariff arrangements that could respond to economic and industry-specific circumstances. The Tariff Concession Instrument No. 0910405, made under the Customs Act, aims to provide a tariff concession for specific washing presses by Enviroaer Industries Pty Ltd, reducing the duty rate from the general 5% to free. The instrument was enacted after the CEO of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for a TCO. The policy objective is to support industries by reducing the cost of imported goods where local production does not exist, thereby potentially stimulating economic activity and competitiveness.
Scope and Application
The Tariff Concession Order No. 0910405, made under the Customs Act 1901, applies specifically to certain washing presses that were the subject of an application by Enviroaer Industries Pty Ltd. This order grants a tariff concession, reducing the customs duty on these goods from the general rate of 5% to free. The application of this Act and subsequent TCO is directed at entities and individuals involved in the importation of these particular washing presses into Australia. The scope of the TCO extends to ensuring that the goods in question do not have substitutable equivalents produced domestically, thereby qualifying them for the tariff concession. The geographic reach of this legislation is national, applying throughout the Commonwealth of Australia. The Act does not specify exclusions or exemptions beyond the criteria set out in sections 269C, 269D, and 269E, and the TCO applies as of the date the application was lodged, which is 27 March 2009. Any broader application or specific exclusions are typically addressed through subordinate instruments, although this particular TCO does not extend its application beyond the specified goods.
Key Provisions
The Customs Act 1901, specifically Part XVA, introduces a mechanism through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (s 269F). This mechanism applies to goods for which a person may apply for a TCO if the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO (s 269SJ). The core criteria for approving a TCO application, as stipulated in section 269C, requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Definitions of key terms such as ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ are provided in sections 269D, 269E, and 269P(3) respectively.
Under this legislative framework, if the CEO is satisfied that the application meets the core criteria, they must issue a written order, or TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)). This specific provision was applied to certain washing presses for which Enviroaer Industries Pty Ltd submitted an application on 27 March 2009. The resulting TCO No. 0910405, issued on 12 June 2009, declared that these presses are subject to item 50 of Schedule 4, resulting in a duty rate of free, as opposed to the general rate of 5% (s 269P(3)).
The Act imposes several obligations on the CEO. Once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to submit their views (s 269K(1)). In this instance, no submissions were received. Additionally, a TCO is deemed to come into force on the day the application for the TCO was lodged (s 269S(1)). Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration in a way that disadvantages that person or imposes liabilities in respect of anything done or omitted before the date of registration (s 269T(1)). Importers will benefit from the TCO by being eligible to apply for a refund of duty on goods imported since the day the TCO came into force (Reg 126(1)(r)).
The Act does not explicitly outline specific offences, penalties, or consequences for breaches of the TCO provisions. However, the general legal framework under which the Customs Act operates includes provisions for enforcement actions against non-compliance with customs regulations. Breaches of customs duties and related obligations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The exact penalties would be determined in accordance with other sections of the Customs Act and related legislation, such as the Crimes Act 1914.