EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919226
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.
Lisec Australia applied for a TCO in respect of certain butyl coating machine on 05 June 2009.
Instrument
TCO No 0919226 was made on 28 August 2009. It declares that those certain butyl coating machine 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. 0919226 is taken to have come into force on 05 June 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 Parliament of Australia, provides a framework for the administration of customs and excise duties, among other things. The Act's Part XVA introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met. This legislative measure was introduced to address the gap in ensuring that Australian industries are not unduly burdened by high customs duties on goods that can be readily substituted by imported products. The policy objective is to promote fair competition and economic efficiency by allowing the importation of goods that are not produced domestically, thereby benefiting consumers and industries that rely on these imports. The explanatory statement for Tariff Concession Instrument No. 0919226 details a specific instance where the CEO of Customs granted a concession on certain butyl coating machines, reducing the duty from 5% to free, effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0919226 under the Customs Act 1901 applies to specific butyl coating machines, providing a concession on customs duty rates for these goods. The act is initiated when an entity, such as Lisec Australia, applies for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO), provided the goods are not specified in section 269SJ of the Act. The CEO must ensure that the application meets the core criteria outlined in section 269C of the Act, particularly that no substitutable goods are produced in Australia at the time of application. If the CEO is satisfied, they issue a TCO, which declares that the goods are subject to a specific item in the Customs Tariff Act 1995, in this case, item 50 of Schedule 4, effectively setting the duty rate at free rather than the general rate of 5%. The TCO applies nationally and comes into force on the date the application is lodged. The legislation does not impose any disadvantages or liabilities on entities other than the Commonwealth and allows for potential duty refunds for importers of the specified goods under the Customs Act Regulations.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0919226 under the Customs Act 1901 (section 269F) establish the process for applying for tariff concessions for certain goods. The instrument allows for a lower rate of customs duty to apply to the goods specified in the order, provided that the Chief Executive Officer of Customs (section 269C) is satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If these conditions are met, the CEO must issue a written order declaring that the goods in question are subject to a prescribed rate of duty specified in the order (section 269P(3)). In this particular case, TCO No. 0919226 applies to certain butyl coating machines, setting the duty rate at free, as opposed to the general rate of 5%.
The Act imposes several obligations on the parties involved. Firstly, applicants such as Lisec Australia must ensure that their applications are valid and meet the core criteria outlined in section 269C. This includes demonstrating that no substitutable goods are produced in Australia. Secondly, the CEO is required to process applications in a timely manner and make a decision based on the evidence provided. If the application meets the criteria, the CEO must issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made (section 269K(1)). In this case, no submissions were received.
The Act also outlines the consequences of breaching its provisions. While the explanatory statement does not detail specific offences or penalties, the Customs Act 1901 and related legislation would apply. Generally, breaches of customs regulations can lead to civil or criminal penalties. Civil penalties can include fines and the recovery of unpaid duties. Criminal penalties can result in imprisonment, reflecting the severity of the breach. The maximum penalties would depend on the specific breach and the applicable legislation at the time. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any new liabilities on individuals or entities.