EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0938677
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.
Dematic applied for a TCO in respect of certain conveyor system on 13 October 2009.
Instrument
TCO No 0938677 was made on 8 January 2010. It declares that those certain conveyor 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. 0938677 is taken to have come into force on 13 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders offer lower customs duty rates on certain goods, subject to specific criteria, and are designed to address economic and trade policy objectives by incentivising the import of goods that are not produced domestically. The Act empowers the Chief Executive Officer of Customs to grant these concessions, provided the application meets the core criteria, which primarily require that no substitutable goods are produced in Australia. This legislative instrument, F2010L01186, specifically addresses an application by Dematic for a tariff concession on certain conveyor systems, which was granted on the basis that no suitable domestic alternatives exist. The policy objective behind such concessions is to encourage the import of innovative or essential goods that could not otherwise be economically sourced within Australia, thereby supporting economic efficiency and consumer choice.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply a reduced rate of customs duty to specified goods. An application for a TCO can be made by any person, provided that the goods in question are not listed in section 269SJ of the Act, which excludes certain types of goods from being subject to a TCO. If an application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business, the CEO must issue a TCO. This process ensures that Australian industries are not unfairly disadvantaged by the concession. The geographic reach of the Act is national, with its provisions applying across all states and territories of Australia. The TCOs themselves are made under the authority of the Act and can specify particular items in the Customs Tariff Act 1995. The application of the Act is not restricted by subordinate instruments but may be influenced by regulations such as those found in the Customs Regulations 1993.
Key Provisions
The primary operative sections of the Customs Act 1901, relevant to Tariff Concession Orders (TCOs), are sections 269F, 269C, and 269P. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. If the CEO determines that the application does not pertain to goods listed in section 269SJ, which are ineligible for TCOs, they must evaluate whether the application meets the core criteria set out in section 269C. Specifically, the application meets these criteria if, on the date of submission, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these core criteria, they must issue a written order under section 269P(3) declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, thereby granting the tariff concession.
The Act imposes certain obligations and requirements on the parties involved. The CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit their views on whether the TCO should be granted. This is outlined in subsection 269K(1). Additionally, the CEO must ensure that the application does not pertain to goods specified in section 269SJ and must evaluate the application against the core criteria specified in section 269C. The applicant must provide sufficient evidence to demonstrate that no substitutable goods were produced in Australia on the date of the application. Furthermore, the Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, thus protecting existing rights and interests.
Failure to comply with the provisions of the Act or the terms of a TCO may result in legal consequences. While the explanatory statement does not explicitly detail specific offences or penalties, breaches of customs regulations generally attract civil and criminal penalties under the Customs Act 1901. Civil penalties can include fines and the recovery of unpaid duties, while criminal penalties may involve fines and imprisonment, depending on the severity and intent of the breach. The maximum penalties for customs offences can vary, with serious offences potentially resulting in substantial fines and lengthy imprisonment terms. It is important for parties involved to adhere to the Act's requirements to avoid these potential consequences.