EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1016150
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 Pty Ltd applied for a TCO in respect of certain continuous blending mixers on 07 April 2010.
Instrument
TCO No 1016150 was made on 25 June 2010. It declares that those certain continuous blending mixers 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. 1016150 is taken to have come into force on 07 April 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. 1016150, enacted in 2010, addresses a specific gap in the Customs Act 1901 by allowing the Chief Executive Officer of Customs to provide tariff concessions on certain goods. This legislation was introduced to facilitate trade by reducing the customs duty on specific imported goods, in this case, certain continuous blending mixers, thereby encouraging their import into Australia. The instrument was developed in response to an application by Godfrey Hirst Australia Pty Ltd, seeking reduced customs duties on these goods. The Australian Parliament enacted this measure to ensure that no substitutable goods were produced in Australia at the time of the application, thereby meeting the core criteria outlined in the Customs Act 1901.
The policy objective of this instrument is to support economic efficiency by lowering the cost of importing specific goods, thereby potentially stimulating demand and increasing market competition. This was achieved by declaring that the goods in question are subject to a free rate of duty, as opposed to the general rate of 5%. Importantly, the instrument ensures that the rights of importers are positively affected, with provisions for duty refunds on goods imported since the TCO was taken to have come into force on 7 April 2010. No liabilities are imposed on any person under this Tariff Concession Order.
Scope and Application
The Tariff Concession Instrument No. 1016150, established under Part XVA of the Customs Act 1901, applies to entities and individuals seeking tariff concessions for specified goods. This legislation mandates that the Chief Executive Officer of Customs must consider applications for Tariff Concession Orders (TCO) if they meet the core criteria outlined in the Act, which includes the absence of substitutable goods produced in Australia at the time of application. The application process requires the CEO to evaluate whether the goods in question can be deemed as substitutable to those produced domestically, thus ensuring that the concession is granted appropriately. The TCO applies nationally, with its effects commencing on the date of application, as per subsection 269S(1) of the Act. Importantly, the TCO does not retroactively affect the rights or liabilities of any party except the Commonwealth, ensuring that it does not disadvantage any person or impose new liabilities for actions taken prior to the concession's effective date.
Key Provisions
The Customs Act 1901, through Part XVA, establishes a framework for Tariff Concession Orders (TCOs) (s 269F). The Chief Executive Officer (CEO) of Customs has the authority to issue a TCO if an application is submitted and it is determined that the goods in question do not fall under the exclusions specified in section 269SJ. If the CEO is satisfied that the application complies with the core criteria, which requires that no substitutable goods were produced in Australia on the day the application was lodged (s 269C), a TCO is to be issued. This order specifies that the goods in question are subject to a reduced customs duty rate as outlined in the Customs Tariff Act 1995 (s 269P(3)).
The obligations imposed by the Act on applicants and the CEO include the submission of an application that meets the core criteria (s 269C) and the CEO's responsibility to review and decide on applications based on these criteria. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (s 269K(1)). In the case of TCO No. 1016150, Godfrey Hirst Australia Pty Ltd applied for a concession on certain continuous blending mixers, and no submissions were received in response to the published notice.
Section 269S(1) of the Act mandates that a TCO is considered to come into force on the day the application is lodged. Therefore, TCO No. 1016150, which was lodged on 07 April 2010, is deemed to have commenced on that date. This TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person prior to its registration (s 269S(1)). Importers of the affected goods are granted the right to apply for a refund of duty on goods imported since the TCO's effective date (Reg 126(1)(r)).
The Act also outlines consequences for non-compliance. Although the Explanatory Statement does not specify particular offences or penalties related to breaches of the TCO provisions, it is implied that breaches of the Customs Act 1901 may lead to civil or criminal penalties. The maximum penalties for breaches of the Customs Act can include fines and imprisonment, depending on the severity of the offence. However, specific penalties are not detailed in the Explanatory Statement.