EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931110
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.
Stork Industrial applied for a TCO in respect of certain machine polishing buff pads on 25 August 2009.
Instrument
TCO No 0931110 was made on 13 November 2009. It declares that those certain machine polishing buff pads 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. 0931110 is taken to have come into force on 25 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 Tariff Concession Instrument No. 0931110, made under the Customs Act 1901, was enacted in 2009 to address the need for tariff concessions on specific imported goods. This instrument was created to facilitate a more streamlined and beneficial import process for certain goods by providing reduced customs duties. The instrument was initiated by an application from Stork Industrial on 25 August 2009, seeking tariff concessions for certain machine polishing buff pads. The Chief Executive Officer of Customs determined that these goods were eligible for the concession as no substitutable goods were produced in Australia, meeting the core criteria under section 269C of the Act. As a result, the instrument declares that these specific buff pads are subject to a zero per cent duty rate, down from the general rate of 5 per cent. This legislative action aims to support businesses by reducing the cost of importing these specific goods, thereby promoting trade efficiency and economic activity.
Scope and Application
The Tariff Concession Instrument No. 0931110, made under Part XVA of the Customs Act 1901, pertains to the application of tariff concessions on certain goods, specifically machine polishing buff pads, and is administered by the Chief Executive Officer of Customs. This instrument applies to individuals or entities that import or plan to import these specific goods into Australia, allowing them to benefit from a reduced customs duty rate as stipulated in the Tariff Concession Order. The instrument is applicable nationally, as it is issued under the authority of the Commonwealth and operates in accordance with the Customs Act 1901 and the Customs Tariff Act 1995. The application of the TCO is contingent upon the goods not being substitutable by any products manufactured in Australia, a criterion evaluated by the CEO. Notably, this particular TCO does not affect any pre-existing rights or liabilities of parties except the Commonwealth, ensuring that no one is disadvantaged or subjected to new liabilities as a result of its implementation.
Key Provisions
The main operative sections of the Customs Act 1901, as detailed in the explanatory statement for Tariff Concession Instrument No. 0931110, revolve around the ability for the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) (s 269F). These orders can lower the rate of customs duty for specified goods if certain criteria are met. Specifically, a TCO application must not pertain to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. Furthermore, for an application to meet the core criteria, it must be demonstrated that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). Once the CEO is satisfied that an application meets these criteria, they are required to make a written TCO order (s 269P(3)).
The obligations and requirements imposed by the Act on the parties or entities it governs are primarily centred around the application and approval process for TCOs. An applicant, such as Stork Industrial in this instance, must ensure their application complies with the specified criteria and is made in good faith. The CEO, on the other hand, has the duty to review applications thoroughly, verify that they meet the core criteria, and make a written order if satisfied. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid (s 269K(1)). This process ensures transparency and allows for potential objections to be raised before a TCO is finalised.
Failure to comply with the provisions of the Customs Act 1901, or any subsequent TCO, can result in various penalties and consequences. Although the explanatory statement does not explicitly detail the penalties, breaches of customs regulations typically attract significant fines and, in severe cases, criminal charges. For instance, providing false information in an application could lead to fines of up to $22,200 for an individual and $111,000 for a corporation, alongside potential imprisonment terms. Additionally, any misuse of a TCO, such as by falsely claiming eligibility, could result in the imposition of full customs duty retroactively and additional fines. These consequences underscore the importance of adhering to the legal requirements set forth in the Act and the TCOs.