EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944895
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.
Enologica Vason RSL Organizzazone applied for a TCO in respect of certain cross flow filtration machines on 25 November 2009.
Instrument
TCO No 0944895 was made on 26 February 2010. It declares that those certain cross flow filtration 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 0944895 is taken to have come into force on 25 November 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 Parliament of Australia, provides a framework for the administration of customs and excise duties. A significant part of this framework is found in Part XVA, which allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. The intent behind this part of the Act is to provide a mechanism for granting tariff concessions on certain goods, thus potentially lowering the customs duty applied to these goods. The Explanatory Statement for Tariff Concession Instrument No. 0944895, issued in 2010, outlines the process and criteria for such concessions. The instrument was made in response to an application by Enologica Vason RSL Organizzazone for tariff concessions on specific cross-flow filtration machines. The objective was to address the lack of locally produced substitutable goods, thereby meeting the core criteria set out in the Act for the application of a lower rate of customs duty.
Scope and Application
The Customs Act 1901, as amended, applies to the process of granting tariff concession orders (TCOs) for certain goods, allowing for a lower rate of customs duty. This legislation is specifically pertinent to entities and individuals who apply for these concessions, ensuring they meet the core criteria specified under section 269C of the Act. The Act mandates that a TCO can only be applied to goods that are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. Any application for a TCO must also adhere to the exclusions outlined in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions. The scope of this legislation is national, given its basis in the Commonwealth Customs Act 1901, and it can be further refined or extended through subordinate instruments, such as the Customs Tariff Act 1995. The particular TCO No. 0944895 applies to certain cross-flow filtration machines, which benefit from a duty-free rate upon the application being approved and published in the Gazette.
Key Provisions
The main operative sections of the Customs Act 1901 as it relates to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269K, and 269S, among others. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO. If the CEO determines that the application meets the core criteria outlined in section 269C, the CEO must make a written order, which is the TCO (section 269P(3)). This order specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively granting a lower rate of customs duty. Section 269K requires the CEO to publish a notice in the Gazette after accepting a TCO application, inviting submissions from any interested parties. The TCO is deemed to have come into force on the date the application was lodged, as per section 269S(1).
The Act imposes several obligations on the CEO of Customs, primarily ensuring that TCO applications are assessed against the core criteria outlined in section 269C. If the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, they must proceed to make a TCO. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting submissions from the public (section 269K). If no submissions are received, the CEO continues with the process of making the TCO. The CEO also has the responsibility to ensure that the rights of existing parties are not adversely affected by the TCO, as stipulated under section 269S.
The Act includes provisions for potential breaches and consequences. While the Act does not explicitly list offences or penalties related to TCOs, breaches of other sections within the Customs Act 1901 may incur penalties. For example, section 230A of the Act provides for criminal penalties, including fines and imprisonment, for knowingly making a false statement or representation in connection with the importation or exportation of goods. In the context of TCOs, any misuse or fraudulent application could potentially fall under these general provisions, leading to criminal charges and penalties. The maximum penalties for such offences can vary, with fines up to $22,000 or imprisonment for up to two years, or both, for individuals, and substantially higher penalties for corporations.