EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917154
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.
Renz Masterbind applied for a TCO in respect of certain coil and or spiral forming machines on 20 May 2009.
Instrument
TCO No 0917154 was made on 14 August 2009. It declares that those certain coil and or spiral forming 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. 0917154 is taken to have come into force on 20 May 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 Australian Parliament, provides for the regulation of the import and export of goods. Part XVA of the Act introduces a scheme for Tariff Concession Orders (TCOs) that allows for the application of lower rates of customs duty on specified goods. This scheme was introduced to address the need for facilitating trade by reducing the duty on goods that are not produced domestically. Tariff Concession Instrument No. 0917154, made on 14 August 2009, is an example of how the Act is applied, as it grants a tariff concession for certain coil and spiral forming machines, setting the duty rate at zero. The concession was granted by the Chief Executive Officer of Customs after Renz Masterbind applied for it on 20 May 2009, and the CEO was satisfied that no substitutable goods were produced in Australia at the time of application. The objective of this concession, as with others under the scheme, is to promote trade by ensuring that importers are not unduly burdened by high customs duties on goods that are not locally manufactured.
Scope and Application
The Tariff Concession Instrument No. 0917154, under the Customs Act 1901, applies to specific coil and spiral forming machines, which are subject to a tariff concession order (TCO) made by the Chief Executive Officer of Customs (CEO). The Act pertains to the application and approval process for TCOs, which allow for a lower rate of customs duty on imported goods, provided they meet certain criteria. The TCO applies to Renz Masterbind's application for these particular machines and is effective from the date of the application, 20 May 2009. The geographic scope of the Act is national, as it is an instrument under the Commonwealth's Customs Act. The exclusions specified in section 269SJ of the Act apply, which detail goods that cannot be subject to a TCO. The CEO must determine if the application meets the core criteria, notably that no substitutable goods are produced in Australia. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who might have objections to the TCO; in this instance, no submissions were received. The TCO does not retroactively affect the rights of any person, ensuring that it only benefits those importing the goods from the date of the TCO's effective commencement.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0917154, involve provisions under the Customs Act 1901. Section 269F (1) allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the criteria and does not pertain to goods that cannot be subject to a TCO under section 269SJ, the CEO is mandated to make a written order, a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (section 269P(3)). Section 269C stipulates the core criteria that must be met for a TCO application to be valid, focusing on the absence of substitutable goods produced in Australia on the date the application was lodged.
The obligations imposed by the Act on the parties and entities it governs primarily concern the application process and the criteria for making a TCO. The CEO must assess whether the application complies with section 269C by determining if no substitutable goods were produced in Australia at the time the application was made. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made. If no submissions are received, the CEO proceeds to make the TCO. Furthermore, section 269S(1) mandates that a TCO is considered to come into force on the day the application was lodged.
Regarding the consequences of breaching the provisions of this legislation, the Act does not explicitly state criminal or civil penalties for non-compliance with the TCO process itself. However, it is critical to note that any misuse or fraudulent claims related to the TCO could potentially lead to penalties under other relevant sections of the Customs Act 1901 or other applicable legislation, such as penalties for fraud or misrepresentation. The primary focus of the Act is on the procedural correctness and timely publication of notices, ensuring transparency and fairness in the application process. The TCO is designed to benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force, without imposing any liabilities on any person.