EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1010630
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.
Investech Pty Ltd applied for a TCO in respect of certain air handling machines on 02 March 2010.
Instrument
TCO No 1010630 was made on 28 May 2010. It declares that those certain air handling 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. 1010630 is taken to have come into force on 02 March 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 Tariff Concession Instrument No. 1010630, enacted in 2010 under the Customs Act 1901, was designed to address the need for tariff concessions for specific goods that are not produced in Australia, thereby ensuring a level playing field for Australian businesses that import these goods. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on certain imported goods, provided that no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 1010630 specifically addresses the application by Investech Pty Ltd for tariff concessions on certain air handling machines, which was approved by the CEO upon satisfaction that no substitutable goods were produced domestically. This instrument ensures that the application for tariff concessions is processed in accordance with the legislative requirements and does not adversely affect the rights of any party other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1010630, under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been applied and approved by the Chief Executive Officer of Customs (CEO). The Act specifically applies to entities such as Investech Pty Ltd, which submitted an application for tariff concessions on certain air handling machines. This concession is available for goods that are not produced in Australia and are substitutable, as per the definitions provided in sections 269D and 269E of the Act. The TCO applies nationally, following the Commonwealth's jurisdiction, and benefits importers by providing a lower rate of customs duty, in this case, a reduction from the general rate of 5% to free duty. The application of the TCO is contingent upon the CEO's satisfaction that the goods in question are not substitutable to those produced domestically and that they meet the core criteria outlined in the Act. The scope of the TCO does not retroactively affect the rights or impose liabilities on any persons other than the Commonwealth, and it came into effect from the date the application was lodged, as per the commencement provisions in the Act.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs) as outlined in Part XVA (sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ). These sections detail the process for applying for and granting a TCO, including the criteria that must be met for an application to be considered. For example, 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. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not those specified in Section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, a written order (TCO) must be made as per Section 269P(3), declaring that the goods are subject to a prescribed rate of duty specified in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. For the applicant, it is essential to ensure that the goods in question are not listed in Section 269SJ of the Act and that the application is made on the correct date. The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe the TCO should not be made, as per Section 269K(1). The CEO must then review any submissions and decide whether the application meets the core criteria under Section 269C. If satisfied, the CEO must make a written TCO as per Section 269P(3). The TCO, once made, does not affect the rights of any person except the Commonwealth and does not impose any liabilities on any person, as per Section 269S(1).
In terms of penalties and consequences, the Act does not specify particular offences or penalties for breaches directly related to the TCO process itself. However, general provisions within the Customs Act 1901 apply to any breaches of customs regulations. These could include administrative penalties for non-compliance or misleading statements made in an application. Under Section 16DD of the Customs Act 1995, for example, a person who makes a false or misleading statement in connection with the operation of the Act or Regulations may be subject to a penalty of up to $11,100 for an individual and $55,500 for a body corporate. Additionally, any failure to comply with the terms of a TCO could lead to the imposition of duties at the standard rate, which might include retrospective duty payments and potential interest or fines for non-compliance.