EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913050
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.
Laminex Group applied for a TCO in respect of certain postforming machines on 20 April 2009.
Instrument
TCO No 0913050 was made on 10 July 2009. It declares that those certain postforming machines 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. 0913050 is taken to have come into force on 20 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 Instrument No. 0913050, enacted in 2009, was introduced to provide relief from customs duties on specific imported goods that are not produced domestically, thereby addressing a gap in the tariff system. This instrument operates under the Customs Act 1901, enabling the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower customs duty rates for eligible goods. The objective is to support industries by making certain imported goods more affordable, thereby encouraging their use and integration into Australian businesses. The enactment body was the Parliament of Australia, aiming to provide targeted relief without imposing additional burdens or liabilities on individuals or entities, while allowing importers to benefit from duty refunds for qualifying goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901 applies to all individuals and entities importing goods into Australia, and it provides the framework for the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. Specifically, section 269F of the Act allows for applications to be made by any person seeking tariff concessions on certain goods, provided those goods are not specified in section 269SJ as ineligible. If an application meets the core criteria outlined in sections 269C, 269B, and 269D, the CEO is required to issue a TCO, effectively applying a reduced or free duty rate to the specified goods. The geographic scope of this Act is national, impacting all importers across Australia. However, certain goods are excluded from TCO consideration under section 269SJ. The Act also permits the extension or restriction of its application through subordinate instruments, which may further define eligibility criteria or operational procedures.
Key Provisions
The key operative sections of this legislation are found in Part XVA of the Customs Act 1901, specifically sections 269C, 269B, 269D, 269E, and 269P. Section 269C outlines the core criteria that an application for a Tariff Concession Order (TCO) must meet. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P requires the Chief Executive Officer (CEO) of Customs to make a TCO if the application meets the core criteria. The explanatory statement references section 269K(1) which mandates the publication of the TCO application in the Gazette, inviting submissions from interested parties.
The obligations imposed by this Act on the parties involved are primarily centred around the application and assessment process for a TCO. An applicant, such as Laminex Group, must ensure their application meets the core criteria, including proving that no substitutable goods were produced in Australia. The CEO, on receiving an application, must publish it in the Gazette and consider any submissions received. If satisfied that the application meets the criteria, the CEO must make a TCO as specified in section 269P(3). Additionally, the CEO must ensure the rights of existing parties are not adversely affected by the TCO, as stipulated in subsection 269S(1).
In terms of offences and penalties, the Act itself does not explicitly outline penalties for breaches related to TCO applications. However, the consequences of failing to comply with the requirements set out in the Act could include the non-approval of the TCO application and the continuation of the general rate of duty on the goods in question. The Customs Act 1901 and the Customs Tariff Act 1995 may have provisions that deal with non-compliance, but these are not detailed in the explanatory statement. It is likely that any breaches would be subject to the general penalties applicable under the Customs Act, which could include fines and other enforcement actions.
The TCO does not impose any liabilities on any person beyond what is explicitly stated, ensuring that no person (other than the Commonwealth) is disadvantaged or liable for actions taken before the TCO's effective date. Importers, however, will benefit from the ability to apply for a refund of duty on goods imported since the TCO is deemed to have come into force. This benefit is outlined in paragraph 126(1)(r) of the Regulations.