EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912737
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.
Visy Industries Australia applied for a TCO in respect of certain waste paper pulping machine main drive drive gearbox on 17 April 2009.
Instrument
TCO No 0912737 was made on 10 July 2009. It declares that those certain waste paper pulping machine main drive drive gearbox 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. 0912737 is taken to have come into force on 17 April 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 Order No. 0912737, made under the Customs Act 1901, was enacted in 2009 to address the issue of tariff concessions for specific goods not produced domestically in the ordinary course of business. The Act, overseen by the Chief Executive Officer of Customs, provides for lower rates of customs duty on goods subject to Tariff Concession Orders (TCOs). This particular TCO, issued on 10 July 2009, pertains to certain waste paper pulping machine main drive gearboxes, for which the general duty rate is 5%, but which are subject to a zero duty rate under this concession. The instrument was introduced following an application by Visy Industries Australia on 17 April 2009, and it became effective from the same date, without imposing any liabilities on persons other than the Commonwealth and without disadvantaging any existing rights.
Scope and Application
The Customs Act 1901, specifically through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These orders can lower the rate of customs duty on specified goods, provided that an application is made by a person and meets certain criteria, such as the absence of substitutable goods produced in Australia. The TCO scheme applies to goods that are not specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. This process is national in scope, affecting entities and individuals involved in the importation of the specified goods across Australia. The legislation allows for the scope of application to be extended or restricted through subordinate instruments, which may include detailed rules and regulations under the Customs Tariff Act 1995. The TCO No. 0912737, for example, was issued on 10 July 2009, applying to certain waste paper pulping machine main drive gearboxes and setting their duty rate to free, down from the general rate of 5%. This concession became effective from 17 April 2009, the date the application was lodged, and does not affect the rights or impose liabilities on any person in relation to actions taken before the date of registration.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0912737 (the Instrument) are sections 269C, 269P(3) and 269S(1) of the Customs Act 1901 (the Act). Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) to be made, which requires that no substitutable goods were produced in Australia on the day the TCO application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must issue a written order (the TCO). Lastly, section 269S(1) provides that a TCO is considered to have come into force on the day the TCO application was lodged.
Under the Act, the CEO is obligated to make a TCO if the application meets the core criteria set out in section 269C. Additionally, as stipulated in subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit objections or comments. The CEO must consider these submissions before deciding whether to issue the TCO. In this particular case, no submissions were received in response to the published notice.
Failure to comply with the requirements of the Act or the Instrument may lead to various civil or criminal consequences. While the explanatory statement does not specify particular offences, breaches of customs laws can result in penalties such as fines and, in severe cases, imprisonment. The maximum penalties for customs offences can be found in the Crimes Act 1914, which may include fines of up to $22,200 for individuals and $111,000 for corporations, alongside potential imprisonment terms depending on the severity of the offence.