EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0935302
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.
Autopak Vetlab Group applied for a TCO in respect of certain jet mill system on 18 September 2009.
Instrument
TCO No 0935302 was made on 27 November 2009. It declares that those certain jet mill system 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. 0935302 is taken to have come into force on 18 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 Customs Act 1901, enacted by the Australian Parliament, introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These TCOs allow for a lower rate of customs duty on specified goods, provided certain criteria are met. The Act aims to facilitate the importation of goods that are not domestically produced, thereby supporting Australian businesses that rely on imported materials. Instrument TCO No. 0935302, made under the authority of the Customs Act, was introduced on 27 November 2009, in response to an application by Autopak Vetlab Group for a tariff concession on certain jet mill systems. The decision to grant this concession was based on the determination that no substitutable goods were produced in Australia, leading to a reduction in the duty rate from 5% to free. The instrument came into effect on 18 September 2009, the date the application was lodged, and it benefits importers by allowing them to apply for a refund of duty on goods imported since that date, without imposing any liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0935302, made under the Customs Act 1901, applies to the jet mill systems specified in the instrument, which are subject to a tariff concession order issued by the Chief Executive Officer of Customs. This concession is applicable to goods imported into Australia, effectively reducing the customs duty from the general rate of 5% to zero for these specified goods. The instrument was enacted to benefit the applicant, Autopak Vetlab Group, by allowing them to import the jet mill systems without incurring customs duty, provided no substitutable goods were produced in Australia at the time of the application. The instrument has a national reach and applies to all relevant goods imported into Australia, regardless of the state or territory. The Act does not disadvantage any existing rights of persons other than the Commonwealth and does not impose any liabilities on persons for actions taken prior to the registration of the order. Additionally, the instrument does not specify any exclusions or exemptions, applying broadly to the named goods as long as they meet the criteria outlined in the Customs Act 1901.
Key Provisions
The Tariff Concession Order No. 0935302, under section 269F of the Customs Act 1901, allows for a reduction in the customs duty rate on certain jet mill systems from the general rate of 5% to free. This concession is granted upon the application of Autopak Vetlab Group, provided that no substitutable goods were produced in Australia on the day the application was lodged, as stipulated in section 269C. The CEO of Customs must ensure that the application does not concern goods listed in section 269SJ, which are ineligible for such concessions. If these criteria are met, the CEO is obligated to issue a written Tariff Concession Order (section 269P(3)), which was done in this case on 27 November 2009.
Under this legislation, the CEO of Customs must also comply with the requirement to publish a notice in the Gazette, as per subsection 269K(1), inviting any interested parties to submit reasons why the concession should not be granted. In this instance, no submissions were received in response to this notice. Additionally, section 269S(1) mandates that the TCO is considered effective from the date the application was lodged, which for this TCO was 18 September 2009. This date ensures that the rights of all parties, except the Commonwealth, are preserved without incurring any liabilities for actions taken before the TCO's effective date.
The obligations imposed by this legislation on parties involve ensuring compliance with the specified conditions for a TCO. Specifically, the CEO of Customs must rigorously verify that no substitutable goods are produced in Australia at the time of application and that the goods do not fall under the exclusions listed in section 269SJ. Moreover, the CEO must also publish the notice in the Gazette to allow for public submissions, although in this case, no submissions were received. Importers, as beneficiaries of this TCO, have the right to apply for a refund of duty on goods imported since the effective date of the TCO, as provided under paragraph 126(1)(r) of the Regulations.
Breaching the conditions of a Tariff Concession Order, or misrepresenting facts in an application, could lead to legal consequences. While the explanatory statement does not detail specific offences, penalties, or consequences for breach, it is implied that any non-compliance with the Act's provisions could result in civil or criminal penalties. For example, misrepresenting facts in an application could be viewed as fraudulent behaviour, which might attract criminal sanctions under relevant legislation. The maximum penalties for such offences would depend on the specific laws applicable at the time of the breach.