EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1013346
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.
Polysius Australia applied for a TCO in respect of certain roll or tyre bodies grinding machines on 17 March 2010.
Instrument
TCO No 1013346 was made on 11 June 2010. It declares that those certain roll or tyre bodies grinding 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. 1013346 is taken to have come into force on 17 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. 1013346, made under the Customs Act 1901, was enacted in 2010 to address the need for tariff concessions on specific imported goods. This legislation was introduced to facilitate the importation of certain roll or tyre bodies grinding machines by granting them a concessionary tariff rate. The instrument was created following an application by Polysius Australia, which sought tariff concessions for these machines on the basis that no substitutable goods were produced in Australia at the time of the application. The primary objective of this measure is to support the importation of specialised machinery that is not domestically manufactured, thereby aiding businesses that require such equipment.
The instrument was approved by the Chief Executive Officer of Customs, who found that the application met the core criteria stipulated in the Customs Act 1901. The instrument was published in the Gazette with an invitation for objections, but none were received. Consequently, the tariff concession became effective from the date the application was lodged, which was 17 March 2010. The policy objective here is to ensure that businesses importing these specific machines benefit from reduced customs duties, which in turn can lead to cost savings and potentially more competitive pricing in the market.
Scope and Application
The Tariff Concession Instrument No. 1013346 under the Customs Act 1901 applies specifically to certain roll or tyre bodies grinding machines. This Act allows for the application of lower rates of customs duty on goods specified in a Tariff Concession Order (TCO), which is issued by the Chief Executive Officer of Customs (CEO). An application for a TCO must not concern goods listed in section 269SJ of the Act, which excludes certain specified goods from eligibility for tariff concessions. The Act mandates that a TCO can only be issued if no substitutable goods are produced in Australia at the time of the application, as outlined in sections 269C and 269D. The CEO must publish a notice in the Gazette to invite submissions regarding the application, although no submissions were received for TCO No. 1013346. The TCO comes into force on the date the application is lodged, which for this case was 17 March 2010, and it does not affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The primary sections of the Customs Act 1901 that are relevant to the Tariff Concession Order (TCO) include sections 269C, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, and the goods are not specified in section 269SJ, then the CEO is required to make a written order, as stipulated in section 269P(3). This order declares that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ of the Act and that the application meets the core criteria, particularly that no substitutable goods were produced in Australia on the day the application was lodged. Upon making a TCO, the CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made. In this case, no submissions were received.
Failure to comply with the provisions of the Customs Act 1901 can result in legal consequences. Although the explanatory statement does not explicitly outline offences or penalties, breaches of the Act generally can lead to civil or criminal penalties. The specific penalties would depend on the nature of the breach and could include fines or imprisonment for serious violations. The Act does ensure that the TCO does not affect the rights of any person adversely or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration.
Under the Customs Tariff Act 1995, importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. This provision ensures that the rights of importers are beneficially affected, without imposing any liabilities on them. The TCO itself does not disadvantage any person or impose any new liabilities.