EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000793
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.
Fantastic Lounge Factory applied for a TCO in respect of certain cross cut sawing machines on 06 January 2010.
Instrument
TCO No 1000793 was made on 26 March 2010. It declares that those certain cross cut sawing 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. 1000793 is taken to have come into force on 06 January 2010.
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 by the Parliament of Australia to establish a comprehensive framework for the administration of customs duties and related matters. One of the mechanisms within this framework is the Tariff Concession Order (TCO), which allows for the reduction or elimination of customs duties on specified goods. This concession is designed to support Australian industry by making imported goods more competitive, thereby encouraging their use and integration into the domestic market. Tariff Concession Instrument No. 1000793, introduced in 2010, exemplifies this mechanism by providing duty-free status to certain cross cut sawing machines, following an application by Fantastic Lounge Factory. This instrument aims to ensure that no substitutable goods are produced domestically, thereby justifying the tariff concession under the Act’s provisions. The policy objective is to foster a competitive market environment by reducing the cost burden on imported goods, ultimately benefiting importers and supporting the broader economic objectives of the Customs Act 1901.
Scope and Application
The Tariff Concession Instrument No. 1000793 applies to specific cross cut sawing machines and is a legislative measure under Part XVA of the Customs Act 1901, which allows for the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act applies to any individual or entity that imports the specified goods, effectively reducing the customs duty on these items. The geographic reach of this legislation is national, as it pertains to the Commonwealth's customs duties and the associated tariff concessions. The scope of the legislation is limited to the particular cross cut sawing machines in question and excludes any goods specified in section 269SJ of the Act, which are ineligible for TCOs. Additionally, the legislation does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth for actions taken prior to the registration of the TCO. The TCO, which came into effect on the date of the application, provides a benefit to importers by allowing them to apply for a refund of duty on the goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1000793 are sections 269C, 269P, and 269S. Section 269C (3) of the Customs Act 1901 outlines the core criteria for a Tariff Concession Order (TCO) application to be approved by the Chief Executive Officer (CEO) of Customs. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring the goods in question are eligible for the tariff concession. This is further explained in section 269P (3), which states that if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S (1) 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.
The obligations imposed by this legislation on the parties it governs are primarily those of the CEO of Customs. When a TCO application is lodged, the CEO must first determine if it is in respect of goods specified in section 269SJ, which are ineligible for a TCO. If not, the CEO must then decide whether the application meets the core criteria outlined in section 269C (3). This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, as defined by section 269D (goods produced in Australia), section 269E (ordinary course of business), and section 269D (substitutable goods). If the application meets the criteria, the CEO must then make a TCO, as per section 269P (3). The CEO is also required to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as per section 269K (1).
There are no direct offences or penalties specified within this particular legislation for breaches of the TCO provisions. However, any breach of the Customs Act 1901 or the associated regulations may incur civil or criminal penalties. The severity of these penalties will depend on the nature of the breach and could include fines and imprisonment. The specific penalties are detailed in the relevant sections of the Customs Act 1901 and associated regulations. For example, under section 126 (1) (r) of the Regulations, there are provisions for refund of duty on goods imported since the TCO is taken to have come into force. The TCO itself does not impose any liabilities on any person, as stated in the explanatory statement.