EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1022538
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.
Bekaert Australia Pty Ltd applied for a TCO in respect of certain textile coating and laminating machines on 19 May 2010.
Instrument
TCO No 1022538 was made on 09 August 2010. It declares that those certain textile coating and laminating 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. 1022538 is taken to have come into force on 19 May 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 Commonwealth Parliament, provides a framework for the administration of customs and excise duties in Australia. Part XVA of this Act allows for the creation of Tariff Concession Orders (TCOs) to offer relief on customs duty for certain goods. Enacted to address gaps in the duty structure, particularly where no substitutable goods are produced domestically, the Act aims to support businesses by reducing the cost of imported goods. In response to an application from Bekaert Australia Pty Ltd, TCO No. 1022538 was made on 8 August 2010, providing a tariff concession for specific textile coating and laminating machines, reducing the duty rate from 5% to free. The process involved the Chief Executive Officer of Customs considering the application against the core criteria and ensuring no public submissions opposed the concession before issuing the order, which came into force on the application date of 19 May 2010.
Scope and Application
The Tariff Concession Instrument No. 1022538, made under the Customs Act 1901, applies specifically to certain textile coating and laminating machines, providing a lower rate of customs duty for these goods as declared by the Chief Executive Officer of Customs. The Act is applicable to individuals or entities that import these machines, thereby benefiting them by reducing the duty from the general rate of 5% to free of charge. This concession is available nationally across Australia, as it operates under the Commonwealth jurisdiction. The Act does not exclude any specific entities or industries from its application but ensures that no substitutable goods are produced in Australia, thus maintaining the integrity of the concession. The CEO must consider applications for tariff concessions and may consult with interested parties, although in this instance, no submissions were received. The TCO is effective from the date the application was lodged, in this case, 19 May 2010, and it does not affect any pre-existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation focus on the process and conditions under which Tariff Concession Orders (TCOs) can be made and applied. Section 269F of the Customs Act 1901 (the Act) allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. The CEO must then assess whether the application meets the core criteria outlined in sections 269C and 269S. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), as specified in the order.
In terms of obligations and requirements, the CEO is mandated to publish a notice in the Gazette, inviting any interested party to lodge a submission if they believe the TCO should not be made. This is stipulated in subsection 269K(1) of the Act. Furthermore, the CEO is required to decide whether the TCO application meets the core criteria, which involves determining whether no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. The CEO must also ensure that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO.
Any breach of the provisions outlined in this legislation can lead to civil or criminal consequences. Although specific offences and penalties are not detailed in the Explanatory Statement, it is implied that failure to comply with the CEO's decisions or the terms of the TCO could result in legal repercussions. The exact nature of these consequences would depend on the specific breach and would likely involve penalties as outlined in the relevant sections of the Customs Act 1901 or any related legislation. The maximum penalties for such breaches could vary, but they generally include fines and, in severe cases, imprisonment.
In summary, this legislation sets out a clear framework for the application and approval of TCOs, ensuring that the CEO's decisions are made in accordance with the specified criteria and that interested parties have an opportunity to be heard. The rights of importers are protected, and the TCO does not impose any liabilities on any person. Any breach of the legislation's provisions could lead to civil or criminal penalties, although the specific penalties are not detailed in the Explanatory Statement.