EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012195
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.
Gilbarco Australia Ltd applied for a TCO in respect of certain piston driven vacuum pumps on 10 March 2010.
Instrument
TCO No 1012195 was made on 28 May 2010. It declares that those certain piston driven vacuum pumps 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. 1012195 is taken to have come into force on 10 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the regulation of customs and excise duties. One of the notable aspects of this Act is its inclusion of Part XVA, which facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can result in a reduced rate of customs duty for certain goods, provided they meet specific criteria. The problem this legislative framework addresses is the potential for certain imported goods to have tariffs that are uncompetitive with locally produced alternatives, thus impacting businesses and consumers. The policy objective behind the TCO scheme is to ensure fair trade practices by potentially allowing reduced duty rates for imported goods where no suitable domestic alternatives exist. Instrument No. 1012195 under this Act, made on 28 May 2010, provides a tariff concession for certain piston-driven vacuum pumps, reducing the duty rate from 5% to free, following an application by Gilbarco Australia Ltd. This particular TCO was introduced without any submissions opposing it, and it came into force on the date the application was lodged, 10 March 2010.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on certain goods. This Act applies to any person or entity that imports goods and seeks to benefit from reduced customs duty through a TCO. The geographic reach of this Act is national, applying across Australia as it is a Commonwealth Act. A TCO cannot be applied to goods specified under section 269SJ of the Act, which includes certain types of goods that cannot be subject to tariff concessions. The application process involves meeting core criteria, such as ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received in the case of TCO No. 1012195. The commencement of a TCO is effective from the date the application is lodged, with no retrospective effect on existing rights or liabilities. Importers of the specified goods can apply for a refund of duty from the date the TCO is taken to have come into force.
Key Provisions
The main sections of the Customs Act 1901, specifically relating to Tariff Concession Orders (TCOs), include section 269F, which allows for applications for TCOs, and section 269C, which outlines the criteria that must be met for an application to be approved. A TCO application meets the core criteria if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to issue a written TCO if the application meets these criteria. In this case, TCO No. 1012195 was issued for certain piston driven vacuum pumps on 28 May 2010, declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations and requirements on parties applying for TCOs and on the CEO. Firstly, applicants must ensure that their goods meet the core criteria, specifically that no substitutable goods are produced in Australia at the time of application (section 269C). The CEO, on receiving a valid application, must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no submissions are received, the CEO must then decide whether to issue a TCO (section 269P(3)). Once a TCO is issued, it comes into force on the date the application was lodged (subsection 269S(1)). In this instance, TCO No. 1012195 is effective as of 10 March 2010.
The Act also outlines consequences for breaches of its provisions. While the explanatory statement does not specify detailed penalties for non-compliance with TCO provisions, it is reasonable to infer that failure to adhere to the conditions set out in a TCO, or any fraudulent application process, could lead to civil or criminal consequences. These might include fines, penalties, or other legal actions as prescribed by relevant laws. The Customs Act 1901 and associated regulations would provide further details on specific penalties and enforcement mechanisms. The Act ensures that the rights of individuals are protected and that the TCO does not disadvantage anyone or impose liabilities for actions taken before the TCO’s effective date.