EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927089
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.
KOHN Andrew applied for a TCO in respect of certain pouch making machine extension assemblies on 28 July 2009.
Instrument
TCO No 0927089 was made on 23 October 2009. It declares that those certain pouch making machine extension assemblies 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. 0927089 is taken to have come into force on 28 July 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. 0927089 was introduced under the Customs Act 1901 to address the problem of high customs duties on imported goods that have no Australian-made equivalent. Enacted by the Australian Parliament, this instrument allows the Chief Executive Officer of Customs to provide tariff concessions on specific goods, reducing the customs duty rate to zero if certain criteria are met. The policy objective is to support Australian businesses by allowing them to import goods more competitively, thus fostering trade and economic growth. The instrument was created following an application by Kohn Andrew for a tariff concession on certain pouch making machine extension assemblies, and it came into force on 28 July 2009, the date the application was lodged. The instrument does not affect any pre-existing rights or impose new liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0927089 applies to the specific goods, namely certain pouch making machine extension assemblies, and the individuals or entities seeking tariff concessions on these goods. This instrument is an extension of the Customs Act 1901, which governs the administration of customs and excise duties in Australia. The application of this Instrument is contingent upon the criteria set forth in section 269C of the Act, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of the Act is national, with the Instrument operating within the framework of federal legislation, although the application for a tariff concession is made under the purview of the Commonwealth. There are exclusions outlined in section 269SJ of the Act that detail goods which cannot be subject to a tariff concession order, such as those that are prohibited or restricted by other laws. The application of the Act may be extended or clarified through subordinate instruments, but the primary legislation is the Customs Act 1901. The Instrument itself came into effect on the date of the application, 28 July 2009, and does not retroactively affect the rights or liabilities of any party other than the Commonwealth.
Key Provisions
The key operative sections of this legislation under the Customs Act 1901 pertain to Tariff Concession Orders (TCOs) and their conditions, as well as the process for applying for such orders. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C outlines the core criteria for the CEO to consider in determining whether to grant the application, specifically that no substitutable goods were produced in Australia at the time the application was lodged. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must issue a written TCO specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This specific instance, TCO No. 0927089, was issued on 23 October 2009 and applies to certain pouch making machine extension assemblies, setting their duty rate at free, instead of the general rate of 5%.
The obligations and requirements imposed by the Act on the parties involved primarily revolve around the application process and the CEO's assessment of the application. An applicant must ensure that their application is lodged in accordance with the Act and that it does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. The CEO must review the application to determine if it meets the core criteria, as specified in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Upon meeting these criteria, the CEO is required to issue a TCO and publish a notice in the Gazette inviting any objections, as outlined in section 269K(1). In this case, the CEO did not receive any submissions in response to the published notice.
The legislation also outlines the consequences for non-compliance and breach of its provisions. While specific penalties for breach are not detailed in the provided text, it is generally understood that failure to comply with the terms of a TCO or any related statutory obligations could lead to civil or criminal penalties. These may include fines or other sanctions as prescribed by the relevant legislation. The Act ensures that the rights of importers will be beneficially affected, and under paragraph 126(1)(r) of the Regulations, importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. Importantly, the TCO does not impose any liabilities on any person, safeguarding against retroactive disadvantage or liability for actions taken before the TCO's effective date.