EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933723
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.
Olex Australia applied for a TCO in respect of certain cable or tube or conduit extruder machines on 10 September 2009.
Instrument
TCO No 0933723 was made on 27 November 2009. It declares that those certain cable or tube or conduit extruder 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. 0933723 is taken to have come into force on 10 September 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. 0933723, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods to promote economic efficiency and industrial competitiveness. This instrument was developed in response to an application by Olex Australia for a Tariff Concession Order (TCO) concerning certain cable or tube or conduit extruder machines, which were found not to have substitutable goods produced in Australia at the time of the application. The instrument was made by the Chief Executive Officer of Customs, following the legislative requirements set out in Part XVA of the Customs Act 1901, ensuring that the application met the core criteria for tariff concessions. The policy objective of the TCO is to provide relief from customs duty for the specified goods, thereby enhancing the competitiveness of Australian industries by reducing the cost of imported materials necessary for production. The instrument came into force on the date the application was lodged, 10 September 2009, and does not disadvantage any person or impose new liabilities on anyone.
Scope and Application
The Tariff Concession Instrument No. 0933723 under the Customs Act 1901 applies to certain cable or tube or conduit extruder machines, as determined by the Chief Executive Officer of Customs (CEO) upon the application of Olex Australia. The Act facilitates tariff concessions for specific goods by reducing or eliminating customs duty for those goods if the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business. This concession is granted through a Tariff Concession Order (TCO), which in this instance, declares that the specified machines are subject to a 0% duty rate, as opposed to the general rate of 5%. The application and issuance of TCOs are governed by the provisions in Part XVA of the Customs Act 1901, with the CEO required to ensure that the application meets core criteria, including the absence of substitutable goods produced domestically.
The geographic and jurisdictional reach of the TCO is aligned with the national scope of the Customs Act 1901, affecting all relevant imports into Australia. The CEO must publish a notice in the Gazette to invite any interested party to submit reasons against the TCO, although no submissions were received for this specific TCO. The commencement date of the TCO is the date the application was lodged, 10 September 2009, and it does not retroactively affect the rights or impose liabilities on persons other than the Commonwealth for actions taken before its registration. Importers can benefit from the TCO by applying for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 0933723 under the Customs Act 1901, provide for a concession on customs duty for certain cable or tube or conduit extruder machines (section 269P(3)). This concession applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, setting the rate of duty at free, down from the general rate of 5% (section 269P(3)). The instrument was made on 27 November 2009, following an application by Olex Australia on 10 September 2009 (section 269P(3)). The concession is effective from the date the application was lodged, 10 September 2009, as per the commencement provisions (subsection 269S(1)).
The Act imposes specific obligations on parties applying for a Tariff Concession Order (TCO). Firstly, the applicant must ensure that the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO (subsection 269F(1)). The Chief Executive Officer of Customs (CEO) must then assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, the CEO did not receive any submissions (subsection 269K(1)).
Under the Customs Act 1901, there are civil and criminal consequences for breaches of the legislation related to Tariff Concession Orders. Although the explanatory statement does not detail specific offences or penalties under the Customs Act, the general framework of the Act provides for penalties that can include fines and imprisonment for serious breaches. For instance, section 274 of the Customs Act stipulates penalties for false or misleading statements, with fines that can extend up to $11,000 for individuals and $55,000 for corporations, alongside potential imprisonment terms. Additionally, section 275A imposes penalties for offences involving the importation or exportation of prohibited goods, with fines up to $220,000 or imprisonment for up to 10 years, or both. These provisions underscore the seriousness with which the Act treats non-compliance, ensuring that the integrity of the tariff concession scheme is upheld.