EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1017853
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.
Pacific Brands Group applied for a TCO in respect of certain foam hole punching machines on 20 April 2010.
Instrument
TCO No 1017853 was made on 25 June 2010. It declares that those certain foam hole punching 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. 1017853 is taken to have come into force on 20 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. 1017853, enacted in 2010, amends the Customs Act 1901 to provide for a tariff concession order concerning specific foam hole punching machines. This legislative instrument responds to an application from Pacific Brands Group, seeking to reduce the customs duty on certain goods that are not produced in Australia, thereby encouraging their importation. The instrument was enacted by the Chief Executive Officer of Customs, in accordance with section 269F of the Customs Act, following the determination that no substitutable goods were produced domestically, as per section 269C. The policy objective underpinning this instrument is to facilitate the importation of goods that are not manufactured within Australia, thereby supporting economic activity and potentially lowering consumer prices.
The instrument became effective on the date the application was lodged, 20 April 2010, as stipulated by subsection 269S(1) of the Customs Act. No submissions opposing the concession were received, indicating broad acceptance of the application's merits. The tariff concession provides significant benefits to importers, allowing them to apply for duty refunds on imports of these machines since the effective date, without imposing any new liabilities on other parties. This measure aims to enhance the competitiveness of Australian businesses by reducing the cost of importing essential machinery.
Scope and Application
The Tariff Concession Instrument No. 1017853, made under the Customs Act 1901, applies to the certain foam hole punching machines specified in the instrument, which are granted a tariff concession order (TCO) by the Chief Executive Officer of Customs (CEO). The Act pertains to the process by which a TCO may be applied for and granted, providing a lower rate of customs duty on goods that are the subject of a TCO. The instrument is effective from 20 April 2010, the date on which the application was lodged, and benefits importers of the specified goods by allowing them to apply for a refund of duty on goods imported since that date. The instrument applies nationally and is part of the broader scheme set out in Part XVA of the Customs Act 1901. The TCO does not affect the rights of any person, other than the Commonwealth, in respect of anything done or omitted to be done before the date of registration, nor does it impose any liabilities on any person. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties; however, in this case, no submissions were received.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically section 269C, provide that a Tariff Concession Order (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 defines terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', which are crucial for determining whether an application is valid. If the Chief Executive Officer of Customs (CEO) is satisfied that an application meets these criteria, they are required to make a TCO under section 269P(3). This order declares that the goods in question are subject to a prescribed rate of duty, which may be lower than the general rate of duty. In this case, the TCO No. 1017853 specifies that certain foam hole punching machines are subject to a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations on parties applying for a TCO. Firstly, applicants must ensure that the goods in question do not have substitutable equivalents produced in Australia, as per section 269C. They must also provide sufficient evidence to satisfy the CEO that their application meets the core criteria. Additionally, applicants are expected to respond to any submissions or concerns raised by the CEO, although in this case, no submissions were received. The CEO has the responsibility of determining whether the application complies with the Act and making a decision within the stipulated timeframe.
There are no explicit offences or penalties stated in the explanatory statement for failing to comply with the requirements of the Act in the context of TCO applications. However, if an applicant submits a false or misleading application, they could potentially face legal consequences for providing false statements or misrepresentation. The penalties for such actions could range from fines to more severe criminal charges, depending on the extent and impact of the deception. The Act does not detail specific penalties for TCO applications but generally provides for civil or criminal penalties for breaches of the Customs Act.
The Tariff Concession Order No. 1017853, which was made on 25 June 2010, specifies that certain foam hole punching machines are subject to a duty rate of free, which benefits importers by potentially reducing their duty costs. This order came into force on 20 April 2010, the date the application was lodged, and it does not affect the rights of any person other than the Commonwealth in a way that would disadvantage them or impose liabilities for actions taken before the date of registration. Importers can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations. The TCO itself does not impose any new liabilities on any person.