EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1013709
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.
Qer Pty Ltd applied for a TCO in respect of certain shale briquette presses on 18 March 2010.
Instrument
TCO No 1013709 was made on 11 June 2010. It declares that those certain shale briquette presses 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. 1013709 is taken to have come into force on 18 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 Parliament of Australia, provides for the imposition of customs duties on imported goods. The Act includes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO), reducing customs duty rates for certain goods. This mechanism was introduced to address the need for flexible tariff measures that could accommodate specific economic or trade policy objectives, ensuring that Australian businesses remain competitive without unnecessary tariff barriers. Tariff Concession Instrument No. 1013709, issued on 11 June 2010, is an example of this scheme in action, applying to certain shale briquette presses and setting their duty rate at free, as opposed to the general rate of 5%. This instrument was made following an application by Qer Pty Ltd and after satisfying the core criteria set out in the Customs Act, including the absence of substitutable goods produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 1013709 under the Customs Act 1901 applies to the specific case of certain shale briquette presses, as applied for by Qer Pty Ltd on 18 March 2010. The instrument grants a tariff concession order (TCO) to these goods, thereby exempting them from the usual customs duty. The application of this TCO is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The instrument effectively reduces the general duty rate of 5% to zero for the specified goods, and its commencement date is the same as the date the application was lodged, i.e., 18 March 2010. Importantly, the TCO does not adversely affect the rights of any person as at the date of registration, nor does it impose any liabilities on persons other than the Commonwealth for actions taken prior to the registration date. This legislative instrument extends the application of the Customs Act by specifying particular goods eligible for tariff concessions and the conditions under which such concessions are granted.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order (TCO) No. 1013709, pertain to the creation of tariff concessions for certain goods as outlined in section 269F of the Customs Act 1901. This section enables an applicant, such as Qer Pty Ltd, to request a TCO from the Chief Executive Officer (CEO) of Customs if the goods in question are not specified in section 269SJ, which lists items ineligible for tariff concessions. Upon receiving an application, the CEO must determine if it meets the core criteria specified in section 269C. If the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, they are required to issue a TCO as stated in section 269P(3). This TCO, once issued, will apply a zero duty rate to the specified goods, in this case, certain shale briquette presses, as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must ensure that the application is assessed against the core criteria outlined in the Act. The applicant must demonstrate that the goods in question are not substitutable by any goods produced in Australia, which involves showing that no similar goods are produced domestically. Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted, as required by subsection 269K(1). The CEO also has to ensure that the TCO does not adversely affect any pre-existing rights of individuals, except the Commonwealth, and that it imposes no new liabilities on any person.
Failure to comply with the requirements set forth in the Customs Act 1901 can lead to various consequences. While the specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally carry significant penalties. Under the Customs Act, these can include fines and imprisonment for individuals found guilty of offences such as fraud, smuggling, or non-compliance with tariff regulations. The exact penalties will depend on the severity of the breach and the discretion of the court. Furthermore, any civil or administrative penalties that may apply would be determined based on the specific breach and relevant sections of the Act and associated regulations.