EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917678
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.
BOC Limited applied for a TCO in respect of certain blast cleaning machines on 26 May 2009.
Instrument
TCO No 0917678 was made on 14 August 2009. It declares that those certain blast cleaning 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. 0917678 is taken to have come into force on 26 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 Tariff Concession Instrument No. 0917678, enacted under the Customs Act 1901, was introduced to provide a mechanism for reducing customs duties on specific goods that are not produced domestically, thereby encouraging imports and potentially lowering costs for consumers and businesses. This legislative instrument allows the Chief Executive Officer of Customs to issue a Tariff Concession Order (TCO) to apply a lower rate of customs duty on certain goods, provided they meet specified criteria such as the absence of substitutable goods produced in Australia. This legislative measure was designed to address the economic need for tariff concessions where local production does not exist, thereby facilitating trade and potentially enhancing competitive pricing in the market.
The instrument was developed and enacted by the Australian Government, with the underlying policy objective being to support import-dependent industries by reducing the cost burden of customs duties on imported goods, thus fostering a more competitive and efficient market. The instrument's implementation ensures that importers can benefit from the reduced duty rates on specified goods, as long as the application meets the stipulated criteria and no objections are raised during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0917678 under the Customs Act 1901 applies to the concession of customs duties on specific goods, in this instance, certain blast cleaning machines. This concession is applicable to entities or individuals importing these goods into Australia, thus impacting the import process and potentially reducing costs for those importing the specified machines. The application of this instrument is at the federal level, governed by the Commonwealth, and is specifically tailored to goods that are not produced domestically and for which no substitutable goods are available in Australia. The exemption criteria are clearly outlined in section 269SJ of the Act, which details the goods that cannot be subject to a Tariff Concession Order (TCO). The scope of this legislation extends to providing relief to importers by reducing the duty on certain goods to zero, as long as they meet the criteria stipulated in the Act. This legislative measure ensures that the application of tariff concessions is both precise and beneficial, particularly for the importation of specific industrial machinery.
Key Provisions
The primary operative sections of this legislation, under the Customs Act 1901, include sections 269C, 269F, 269P, and 269S, which pertain to the establishment and conditions of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods, provided that the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order (TCO) declaring that the goods in question are subject to a prescribed tariff rate (section 269P). The TCO, as established in section 269S, is considered to have come into force on the day the application was lodged.
The Act imposes several obligations on the parties involved. Firstly, an applicant must ensure that their application for a TCO is valid and meets the criteria specified in section 269C. The CEO is mandated to review the application and determine whether it meets the core criteria, which includes verifying that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If the CEO is satisfied, they must make a TCO as per section 269P. Additionally, the CEO must publish a notice in the Gazette (section 269K), inviting any interested parties to submit objections or reasons why the TCO should not be made.
Failure to comply with the requirements of the Act may result in various consequences. While the explanatory statement does not specify particular offences or penalties, breaches of customs regulations generally attract civil and criminal penalties under the Customs Act 1901. For civil penalties, the Act provides for fines up to a significant amount determined by the courts, depending on the severity and nature of the breach. Criminal penalties can include imprisonment, fines, or both, with the exact penalties varying based on the offence. Importers and other affected parties should be aware that the TCO does not impose any liabilities for actions taken before its registration date, but it does entitle importers to apply for a refund of duty on goods imported since the TCO came into force.