EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008330
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.
Godfrey Hirst Australia applied for a TCO in respect of certain carpet entry machines on 16 February 2010.
Instrument
TCO No 1008330 was made on 30 April 2010. It declares that those certain carpet entry 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. 1008330 is taken to have come into force on 16 February 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 to facilitate and regulate the import and export of goods in Australia. The Act was introduced to address the need for a streamlined and systematic approach to managing customs duties and tariffs. The Tariff Concession Instrument No. 1008330, enacted in 2010, is a part of this legislative framework designed to provide tariff concessions on specific goods. This instrument was introduced to address the need for tariff reductions on particular goods, in this case certain carpet entry machines, which are not produced domestically, thereby benefiting importers by reducing their duty costs. The instrument was enacted by the Chief Executive Officer of Customs under the authority granted by the Customs Act 1901, with the policy objective of promoting trade by reducing the cost of importing specific goods. The instrument ensures that the rights of importers are not adversely affected and provides a mechanism for duty refunds on goods imported since the instrument's effective date.
Scope and Application
The Tariff Concession Instrument No. 1008330, made under Part XVA of the Customs Act 1901, applies to goods specified in the instrument, in this case, certain carpet entry machines. The Act allows for the reduction of customs duty on goods through Tariff Concession Orders (TCOs) when specific criteria are met, such as the absence of substitutable goods produced in Australia. This instrument was created following an application by Godfrey Hirst Australia, and it came into effect on 16 February 2010, the date the application was lodged. The geographic reach of this Act is national, as it pertains to customs duties within Australia. The Chief Executive Officer of Customs is responsible for deciding whether an application meets the core criteria, and the instrument does not affect any rights or impose liabilities on persons other than the Commonwealth. The CEO published a notice in the Gazette inviting submissions, but none were received, leading to the issuance of the TCO. The instrument does not retroactively disadvantage any party and benefits importers by allowing them to apply for a refund of duty on the specified goods.
Key Provisions
The key provisions of this Tariff Concession Order (TCO) are found in sections 269F, 269C, 269B, 269E, 269D, and 269P of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided they do not fall under the exclusions outlined in section 269SJ. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Sections 269B and 269E define "goods produced in Australia" and "ordinary course of business," respectively, while section 269D defines "substitutable goods." If the CEO is satisfied that a TCO application meets these criteria, they must issue a written order (a TCO) under section 269P(3) that applies a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on parties involved in the TCO process. Firstly, the CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO, as per subsection 269K(1). The CEO must then consider these submissions before deciding whether to issue the TCO. In this case, the CEO did not receive any submissions in response to the Gazette notice. Additionally, the Act ensures that a 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 in respect of anything done or omitted to be done before the date of registration.
There are no specific offences or penalties outlined in the Act for breach of the TCO provisions. However, the Act does provide for potential civil or criminal consequences if the terms of the TCO are not complied with. For example, if a person knowingly imports goods that should be subject to the lower duty rate but does not comply with the TCO requirements, they may face legal action. It is important to note that the maximum penalties for breaches of the Customs Act are not specified in this explanatory statement, but they can vary depending on the nature and severity of the breach.