EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1023821
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.
A J Lucas (Operations) Pty Ltd applied for a TCO in respect of certain pipe thruster machines on 28 May 2010.
Instrument
TCO No 1023821 was made on 23 August 2010. It declares that those certain pipe thruster 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. 1023821 is taken to have come into force on 28 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 Parliament of Australia, established a legislative framework for the imposition and collection of customs duties and the regulation of imports and exports. The Act was enacted to address the need for a structured approach to managing customs duties and ensuring the smooth flow of international trade. The Tariff Concession Instrument No. 1023821, which came into effect on 23 August 2010, was introduced to provide tariff concessions for specific goods, in this instance, certain pipe thruster machines. The instrument was made under the authority of the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for the concession. The policy objective was to facilitate the import of these goods by reducing the customs duty from the general rate of 5% to free, benefiting importers and potentially stimulating trade in these particular goods.
Scope and Application
The Tariff Concession Instrument No. 1023821 under the Customs Act 1901 applies to an application made by A J Lucas (Operations) Pty Ltd for tariff concessions on certain pipe thruster machines. This legislation operates within the Commonwealth jurisdiction and provides for the reduction of customs duty on specified goods, provided no substitutable goods are produced in Australia. The application of this instrument is subject to the core criteria outlined in the Act, specifically that no substitutable goods are being produced in Australia in the ordinary course of business. The instrument does not apply to goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The instrument was published in the Gazette to invite submissions, none of which were received, and it came into effect on 28 May 2010, the day the application was lodged. The TCO does not affect any existing rights or impose new liabilities on individuals or entities, except it benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 1023821 (TCO No. 1023821) under the Customs Act 1901, establish the framework for tariff concessions, with Section 269F allowing for applications to the Chief Executive Officer of Customs (CEO) for such concessions. Section 269C outlines the core criteria that must be met for an application to be considered, primarily focusing on whether substitutable goods are produced in Australia at the time of the application. If these criteria are satisfied, the CEO is required, under Section 269P(3), to issue a written order (TCO) that applies a specified tariff concession to the goods in question. In this case, the TCO declares that certain pipe thruster machines are subject to a zero rate of duty, down from the general rate of 5%, as stipulated in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties it governs include the requirement for applicants to ensure their applications meet the core criteria as outlined in Section 269C. This involves demonstrating that no substitutable goods are being produced in Australia at the time of the application. The CEO must also fulfil the obligation to publish a notice in the Gazette, inviting submissions from any interested parties, as mandated by Section 269K(1). This process ensures transparency and allows for potential objections to be raised before a decision is made. Additionally, the CEO has the responsibility to make a decision on the application based on the information provided and any submissions received.
Failure to comply with the provisions of the Customs Act 1901 can lead to various consequences. While the explanatory statement does not specify detailed offences or penalties, breaches of the Act may result in civil or criminal penalties depending on the nature and severity of the violation. These penalties can include fines and, in more serious cases, imprisonment. The exact penalties are determined by the specific sections of the Act that have been contravened and the discretion of the court. It is important for all parties involved to adhere strictly to the requirements set out in the Act to avoid such consequences.