EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949304
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.
Pabitus applied for a TCO in respect of certain agricultural feed mixers on 18 December 2009.
Instrument
TCO No 0949304 was made on 12 March 2010. It declares that those certain agricultural feed mixers 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. 0949304 is taken to have come into force on 18 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 was enacted to provide for the regulation of customs and excise in Australia, including the imposition of customs duty on imported goods. One specific issue the Act addresses is the facilitation of tariff concessions for certain imported goods through Tariff Concession Orders (TCOs). Enacted by the Parliament of Australia, the Act allows the Chief Executive Officer of Customs to reduce or eliminate customs duty on specified goods if certain criteria are met, thereby promoting trade and economic efficiency. This is particularly evident in Tariff Concession Instrument No. 0949304, made under the Customs Act 1901, which granted a tariff concession for certain agricultural feed mixers. This concession was effective from the date of the application, 18 December 2009, and was implemented to ensure that no substitutable goods were produced in Australia at the time, thereby fulfilling the core criteria set out in the Act. The policy objective of this measure is to encourage the importation of specific goods by reducing financial barriers, thereby supporting industries reliant on these imported items.
Scope and Application
The Tariff Concession Instrument No. 0949304 applies to individuals or entities seeking tariff concessions on certain agricultural feed mixers under the Customs Act 1901. This legislation allows for the reduction or waiver of customs duty on specified goods, provided that no substitutable goods are produced in Australia at the time the application is made. The scope of this particular Instrument, TCO No. 0949304, was declared effective from 18 December 2009, the date when the application was lodged by Pabitus. This Instrument operates within the Commonwealth jurisdiction, impacting the importation of the specified agricultural feed mixers and reducing the duty rate from 5% to free, thereby benefiting importers. The Instrument does not affect the rights of any person adversely if the concession is applied retroactively to the date of the application, nor does it impose any new liabilities on individuals or entities. It is worth noting that the application of such tariff concessions can be further detailed or modified through subordinate instruments.
Key Provisions
The primary operative sections of the Customs Act 1901, particularly as related to Tariff Concession Orders (TCOs), include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269SJ. Section 269F permits an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. This application process must be made if the goods are not listed in section 269SJ, which identifies goods that are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, which is contingent upon no substitutable goods being produced in Australia at the time the application was lodged, a TCO is to be issued under section 269P(3). This order declares that the specified goods are subject to a lower rate of customs duty, as prescribed in Schedule 4 of the Customs Tariff Act 1995.
In terms of obligations and requirements, section 269K(1) mandates that, upon accepting a TCO application, the CEO must promptly publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not proceed. If no objections are received, the CEO is required to make the TCO. Section 269S(1) specifies that the TCO is effective from the date the application was lodged, ensuring that any rights accrued prior to the registration of the TCO are preserved, and no new liabilities are imposed on any party other than the Commonwealth.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO may lead to various civil or criminal consequences. While specific penalties are not detailed in the Explanatory Statement, breaches of customs legislation generally attract penalties under the Customs Act and the Crimes Act 1914, which can include fines and imprisonment. For instance, knowingly making a false statement in an application for a TCO could result in significant penalties, including fines up to $22,200 for individuals and higher amounts for corporations, as well as potential imprisonment terms. The severity of penalties reflects the importance of compliance with customs regulations and the potential economic impact of non-compliance.