EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927984
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.
Reed Hycalog applied for a TCO in respect of certain make up and breakout machines on 03 August 2009.
Instrument
TCO No 0927984 was made on 16 October 2009. It declares that those certain make up and breakout 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. 0927984 is taken to have come into force on 03 August 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, facilitates the establishment of a tariff concession scheme through the use of Tariff Concession Orders (TCOs). These orders, administered by the Chief Executive Officer of Customs, provide a reduced rate of customs duty on specified goods, thereby addressing economic and competitive challenges faced by industries by lowering the cost of importing certain products. The Tariff Concession Instrument No. 0927984 was introduced to provide a specific concession to Reed Hycalog for certain makeup and breakout machines, effective from 3 August 2009. The policy objective of this instrument is to ensure that importers of these machines benefit from a free rate of duty, instead of the general 5% rate, thus aligning with the broader goal of supporting Australian industries and reducing the financial burden on businesses.
Scope and Application
The Tariff Concession Instrument No. 0927984, which was established under the Customs Act 1901, applies to entities and individuals who seek tariff concessions for specific goods. This Act allows for the application of a lower rate of customs duty on goods specified in a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. The scope of this legislation is focused on facilitating the importation of goods by reducing customs duty rates, provided that the goods in question are not prohibited from receiving such concessions and meet the core criteria set out in the Act, such as the absence of substitutable goods produced in Australia. The geographic and jurisdictional reach of this Act is national, as it operates within the framework of the Commonwealth’s customs regulations. There are no exclusions or exemptions specified within the Act itself, although it does reference the Customs Tariff Act 1995 for the application of specific duty rates. The application of this Act may be further detailed or extended through subordinate instruments, such as regulations that might provide additional definitions or procedural details.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0927984 are sections 269C, 269B, 269E, 269P, and 269SJ of the Customs Act 1901, which govern the process for applying for and granting Tariff Concession Orders (TCOs). Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269E provides the meaning of "ordinary course of business," while section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, a written TCO must be issued. Section 269SJ sets out goods that cannot be subject to a TCO.
The obligations imposed on parties by this legislation include the requirement for applicants to ensure that their goods do not have substitutable equivalents produced in Australia. The CEO must review applications to verify they meet the core criteria as defined by the Act, and if satisfied, issue a TCO. The CEO is also obligated to publish notices in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received. Importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the TCO was taken to have come into force, as per the Regulations.
The legislation does not specify particular offences, penalties, or consequences for breaches. However, if an entity were to knowingly make a false application for a TCO, they could potentially face legal repercussions under other sections of the Customs Act 1901, which may include fines or imprisonment. While the specific penalties for such actions are not detailed in this TCO, they would generally align with the broader penalties available under the Customs Act for breaches related to customs duty and similar matters.