EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0947553
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.
Pall Australia Pty Ltd applied for a TCO in respect of certain wine lees filtration systems on 07 December 2009.
Instrument
TCO No 0947553 was made on 26 February 2010. It declares that those certain wine lees filtration systems 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. 0947553 is taken to have come into force on 07 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for managing customs duties, including provisions for tariff concessions on specific goods. The Tariff Concession Instrument No. 0947553, issued in 2010, addresses the need to reduce customs duty on particular goods where there are no substitutable products produced domestically. This instrument was created in response to an application by Pall Australia Pty Ltd for a tariff concession on certain wine lees filtration systems, aiming to provide economic benefits by lowering the duty on these imports to zero, thereby fostering trade and potentially lowering consumer costs. The policy objective behind this concession is to support industries by reducing the cost of importing necessary goods, provided no suitable Australian-made alternatives exist.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 0947553, provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that lower the customs duty on certain goods. This process is applicable to any individual or entity that can demonstrate that the goods in question are not substitutable by any goods produced in Australia and that the application meets the core criteria set forth in the Act. The geographic scope of this legislation is national, as it is enacted under the Commonwealth of Australia and applies across all states and territories. The specific TCO No. 0947553 relates to certain wine lees filtration systems and became effective on the date the application was lodged, which is 7 December 2009. Notably, the TCO does not retroactively affect the rights of any person, ensuring that no individual or entity, excluding the Commonwealth, is disadvantaged or subjected to new liabilities for actions taken prior to the TCO’s effective date. Instead, importers of the specified goods will benefit from the reduced duty rate and may apply for a refund of duty paid on imports since the TCO's effective date.
Key Provisions
The primary sections of this legislation revolve around the creation and application of Tariff Concession Orders (TCOs) as per the Customs Act 1901 (section 269F). Specifically, section 269C sets out the core criteria for approving a TCO application, while section 269P(3) mandates that if these criteria are met, the Chief Executive Officer of Customs (CEO) must issue a written order declaring the goods subject to a reduced customs duty rate. Section 269K(1) further requires the CEO to publish a notice in the Gazette, inviting any objections to the TCO application.
The obligations imposed on the parties governed by this legislation include the requirement for applicants to ensure their TCO applications meet the specified core criteria (section 269C). The CEO, on the other hand, must assess the applications against these criteria, make the TCO if applicable, and publish notices in the Gazette to invite objections (sections 269P(3) and 269K(1)). Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them for actions taken before the TCO's registration (subsection 269S(1)).
In terms of breaches and penalties, the Act does not explicitly outline specific criminal or civil penalties for failing to comply with the TCO provisions. However, any breaches of related customs duties or regulations could result in penalties under other sections of the Customs Act 1901. These could include fines and imprisonment for wilful breaches, with penalties varying based on the severity and nature of the breach.
Section 269K(1) also ensures that the rights of third parties are protected by allowing them to submit objections to the CEO, thereby safeguarding against any unfair disadvantages arising from the TCO. This procedural safeguard is critical in maintaining the integrity and fairness of the tariff concession process.
In conclusion, while the specific Act focuses on the procedural aspects of issuing TCOs, the broader Customs Act 1901 provides the framework for enforcing compliance and addressing any breaches, ensuring that the tariff concession scheme operates within a structured and lawful environment.