EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946754
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.
Laminex Group Ltd applied for a TCO in respect of certain wood polishing and/or buffing machines on 02 December 2009.
Instrument
TCO No 0946754 was made on 26 February 2010. It declares that those certain wood polishing and/or buffing 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. 0946754 is taken to have come into force on 02 December 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. 0946754, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, allowing for a lower rate of customs duty. The instrument was made on 26 February 2010, in response to an application by Laminex Group Ltd for tariff concessions on certain wood polishing and/or buffing machines. The instrument was developed by the Chief Executive Officer of Customs and was enacted by the relevant legislature, in this case, the Australian Parliament. The policy objective was to ensure that if no substitutable goods were produced in Australia, a tariff concession could be granted, thereby benefiting importers by reducing the customs duty on these goods. The instrument declares that the specified wood polishing and/or buffing machines are subject to a zero rate of duty, effective from the date of the application on 02 December 2009.
Scope and Application
The Tariff Concession Instrument No. 0946754 under the Customs Act 1901 applies to goods specified in the instrument, namely certain wood polishing and/or buffing machines, which are granted a tariff concession order (TCO) by the Chief Executive Officer of Customs (CEO). This Act facilitates the reduction of customs duty for goods specified in the order, provided certain conditions are met, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The scope of this legislation extends to any entity or person importing the specified goods into Australia, thereby impacting the rights of importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. The geographic reach of the Act is national, as it operates within the framework of the Commonwealth of Australia. The application of the TCO does not affect the rights of any person as at the date of registration and does not impose any new liabilities. However, the CEO retains the authority to extend or restrict the application of the TCO through subordinate instruments as necessary.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as it pertains to Tariff Concession Orders (TCOs), include sections 269C, 269F, and 269P. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the CEO determines that the application meets the core criteria outlined in section 269C, they must then make a written order, as described in section 269P(3). This written order, or TCO, specifies that the goods in question are subject to a lower rate of customs duty, in this case, free of charge instead of the general rate of 5%.
The Act imposes certain obligations and requirements on both the applicant and the CEO. For applicants, the primary requirement is to submit an application to the CEO for a TCO, ensuring that it does not concern goods that are specified in section 269SJ of the Act, which are ineligible for a TCO. The CEO, on the other hand, must assess whether the application meets the core criteria by verifying that no substitutable goods were produced in Australia at the time the application was lodged. If these criteria are met, the CEO must proceed to make a TCO as required by section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit submissions if they believe the TCO should not be made.
Failing to comply with the requirements of the Customs Act 1901 and the associated regulations could result in civil or criminal penalties. While the specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally can lead to fines, penalties, or even imprisonment, depending on the severity of the breach. For instance, knowingly making a false statement or representation in an application for a TCO could be considered an offence under section 237 of the Act, which carries potential penalties that could include fines or imprisonment.
In summary, the legislation clearly outlines the process for applying for and obtaining a Tariff Concession Order, ensuring that the application meets specific criteria and that appropriate notifications are made. Failure to adhere to these requirements may result in significant civil or criminal consequences.