EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937197
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.
Hewsaw Pty Ltd applied for a TCO in respect of certain chipping inline single line sawing line on 01 October 2009.
Instrument
TCO No 0937197 was made on 18 December 2009. It declares that those certain chipping inline single line sawing line 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. 0937197 is taken to have come into force on 01 October 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. 0937197, enacted under the Customs Act 1901, was introduced to provide relief to specific goods by reducing their customs duty rates. This instrument addresses the problem of potentially high customs duties on imported goods that do not have domestic substitutes, thereby encouraging import and usage of these goods. The Customs Act 1901 establishes a framework where the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) if certain criteria are met, such as the absence of substitutable goods produced in Australia. Hewsaw Pty Ltd applied for such a concession on 1 October 2009, and upon meeting the criteria, the CEO issued Instrument TCO No. 0937197 on 18 December 2009, reducing the duty on the specified goods to zero. This legislative measure aims to ensure that importers are not unduly burdened and can benefit from the reduced tariff rates, enhancing the accessibility and affordability of the specified goods in the market.
Scope and Application
The Tariff Concession Instrument No. 0937197, made under the Customs Act 1901, applies to the specific chipping inline single line sawing line goods for which Hewsaw Pty Ltd applied for tariff concessions. The Act allows for tariff concessions to be granted by the Chief Executive Officer of Customs (CEO) for goods where no substitutable goods are produced in Australia in the ordinary course of business. This instrument extends to the national level and applies to entities seeking tariff concessions on imported goods, effectively reducing their customs duty liability. The geographic reach of this legislation is nationwide, as it pertains to the importation of goods into Australia. The Act does not specify exclusions or exemptions, but it does provide that the application of a Tariff Concession Order (TCO) does not affect the rights of any person other than the Commonwealth in respect of actions taken before the TCO's effective date. The instrument came into force on the date the application was lodged, 1 October 2009, and the CEO published a notice in the Gazette inviting any objections, though none were received. The Act may be extended or restricted through subordinate instruments, such as regulations or further orders, which may provide additional details or criteria for the application of tariff concessions.
Key Provisions
The primary operative sections of the Customs Act 1901 in this context include sections 269C, 269B, 269F, 269P, and 269SJ (subsections 269K(1) and 269S(1) are also relevant). Section 269F permits an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the application meets the core criteria (section 269C), and is not in respect of goods specified in section 269SJ, the CEO must make a written order (section 269P(3)). A TCO is taken to have come into force on the day the application for the TCO was lodged (subsection 269S(1)). The CEO must also publish a notice in the Gazette inviting submissions on the application (subsection 269K(1)).
The Customs Act 1901 imposes obligations on the CEO to consider applications for TCOs and determine if they meet the core criteria. The CEO must also ensure that the application is not in respect of goods specified in section 269SJ and publish a notice in the Gazette inviting submissions on the application. The CEO is required to make a written order if the application meets the core criteria. Additionally, the Act imposes obligations on applicants to ensure that their applications for TCOs are valid and meet the criteria.
There are no specific offences or penalties outlined in this Explanatory Statement for breaches of the Customs Act 1901 in relation to TCOs. However, general offences and penalties may apply for breaches of the Act or its regulations. For example, section 247 of the Customs Act 1901 provides that a person who contravenes any provision of the Act or the regulations is liable to a penalty of up to $1,100 for an individual and up to $5,500 for a body corporate. In more serious cases, criminal penalties may apply, including fines of up to $220,000 for an individual and up to $1,100,000 for a body corporate, and/or imprisonment for up to five years.
The Tariff Concession Order No. 0937197 made under the Customs Act 1901 provides for a lower rate of customs duty on certain chipping inline single line sawing lines. The CEO was satisfied that no substitutable goods were produced in Australia, and therefore made the order. The order is taken to have come into force on 01 October 2009. 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 order does not impose any liabilities on any person.
Overall, the Customs Act 1901 provides a scheme for the granting of TCOs, which can result in a lower rate of customs duty on certain goods. The CEO is required to consider applications for TCOs and determine if they meet the core criteria, and applicants must ensure that their applications are valid and meet the criteria. There are no specific offences or penalties outlined in this Explanatory Statement for breaches of the Act in relation to TCOs, but general offences and penalties may apply. The Tariff Concession Order No. 0937197 provides for a lower rate of customs duty on certain chipping inline single line sawing lines, and importers of such goods will be able to apply for a refund of duty on goods imported since the order came into force.