EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939786
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.
Tacca Industries applied for a TCO in respect of certain vacuum thermoforming machine on 22 October 2009.
Instrument
TCO No 0939786 was made on 8 January 2010. It declares that those certain vacuum thermoforming machine 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. 0939786 is taken to have come into force on 22 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. 0939786, enacted under the Customs Act 1901, addresses the problem of ensuring that certain goods that are not produced in Australia can benefit from tariff concessions, thereby encouraging their importation and use within the country. This legislative instrument was developed in response to applications from businesses such as Tacca Industries for tariff reductions on specific goods, in this case, vacuum thermoforming machines. The instrument was introduced by the Parliament of Australia and its policy objective is to facilitate the import of goods that are not domestically produced by providing a lower rate of customs duty, thus making such goods more competitive and accessible.
The instrument was made effective as of 22 October 2009, the date on which the application was lodged. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for the tariff concession. Consequently, a zero percent duty rate was applied to the specified vacuum thermoforming machines, down from the general rate of 5%. This change was implemented without affecting any existing rights or imposing new liabilities on persons other than the Commonwealth, ensuring that the rights of importers were beneficially affected from the effective date of the tariff concession.
Scope and Application
The Customs Act 1901, as amended, establishes a framework for Tariff Concession Orders (TCOs) under which specific goods may be exempt from standard customs duty rates. This particular Act applies to the Chief Executive Officer of Customs (CEO), who has the authority to make TCOs for goods that are not produced in Australia and for which no substitutable goods are manufactured domestically. The Act applies to entities or individuals seeking tariff concessions for the importation of certain goods, provided these goods do not fall under the restricted list specified in section 269SJ. The geographic scope of this legislation is national, affecting all imports into Australia. The application of the Act is not limited by state or territory boundaries, thus having a uniform application across the Commonwealth. Notably, the Act does not impose any new liabilities on individuals or entities beyond what is already stipulated, ensuring that the rights of importers are protected and may benefit from duty refunds for goods imported since the TCO came into force. The Act's provisions can be extended through subordinate instruments, allowing for the detailed regulation of specific cases or goods categories.
Key Provisions
The Tariff Concession Instrument No. 0939786, which pertains to certain vacuum thermoforming machines, contains several key provisions. Section 269F of the Customs Act 1901 allows any person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of specific goods. In this case, Tacca Industries applied for a TCO for certain vacuum thermoforming machines on 22 October 2009, which was subsequently granted by the CEO on 8 January 2010. According to section 269P(3) of the Act, the CEO must issue a written order if satisfied that the application meets the core criteria, which are detailed in sections 269C and 269D. For this particular TCO, the CEO determined that no substitutable goods were produced in Australia on the day the application was lodged, thus satisfying the core criteria.
Under the Customs Act, the CEO has the obligation to decide whether a TCO application meets the core criteria and, if satisfied, to issue a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269K(1) of the Customs Act also requires the CEO to publish a notice in the Gazette, inviting submissions from any interested parties who believe the TCO should not be granted. In this instance, the CEO did not receive any submissions. Additionally, section 269S(1) specifies that a TCO is effective from the date the application was lodged. Consequently, TCO No. 0939786 is considered effective from 22 October 2009.
The Tariff Concession Instrument imposes certain obligations on the parties it governs. The CEO must ensure that the application meets the core criteria, as defined in sections 269C and 269D of the Customs Act. If the CEO is satisfied that the application is valid, a TCO must be issued, as per section 269P(3). Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from interested parties. 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 stipulated in paragraph 126(1)(r) of the Regulations.
Should any party breach the obligations outlined in the Customs Act, various penalties and consequences may apply. The Act does not specify maximum penalties for breach of a TCO, but breaches of the Customs Act in general can lead to civil and criminal penalties. Civil penalties may include fines and the seizure of goods, while criminal penalties can result in imprisonment. Additionally, any liabilities incurred by the breach would be imposed according to the provisions of the Act and the applicable regulations.