EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1025387
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.
Murray Goulburn Cooperative Co Ltd applied for a TCO in respect of certain bottle trolley loading machines on 07 June 2010.
Instrument
TCO No 1025387 was made on 30 August 2010. It declares that those certain bottle trolley loading 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. 1025387 is taken to have come into force on 07 June 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. 1025387 was enacted in 2010 as part of the Customs Act 1901, addressing a specific economic need by providing tariff concessions for certain goods imported into Australia. This legislation allows for reduced customs duties on specified goods, facilitating the import of these items at a lower cost and potentially enhancing trade efficiency and competitiveness. The instrument was introduced to support industries by reducing the financial burden of customs duties on particular products, thereby encouraging importation and potentially benefiting consumers through lower prices. Enacted by the relevant federal authority, this instrument aims to align with broader economic policies that promote trade and industry development within Australia.
The instrument came into force following the application by Murray Goulburn Cooperative Co Ltd for tariff concessions on certain bottle trolley loading machines. The process involved assessing whether these machines could be substituted with locally produced goods, which led to the conclusion that no substitutable goods were being produced in Australia, thereby meeting the core criteria set out in the Customs Act 1901. This decision resulted in the application of a zero rate of customs duty on these specific machines, effective from the date the application was lodged, 7 June 2010. This concession is expected to benefit importers by reducing their duty costs and potentially lowering the prices of the imported goods for consumers.
Scope and Application
The Tariff Concession Instrument No. 1025387 under the Customs Act 1901 applies specifically to certain bottle trolley loading machines, as applied for by Murray Goulburn Cooperative Co Ltd on 07 June 2010. The Act facilitates the application of tariff concessions through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs, provided the goods in question are not specified in section 269SJ of the Act, which excludes certain types of goods from TCO eligibility. A TCO is issued when the CEO determines that no substitutable goods are produced in Australia, ensuring that the imported goods are not readily replaceable by domestically produced alternatives. The instrument reduces the duty rate from the general 5% to free, thereby benefiting the rights of importers who can apply for duty refunds on imports since the TCO's effective date. The TCO does not impose any new liabilities or disadvantage existing rights of any person other than the Commonwealth, and it came into force on the date of the application, 07 June 2010.
Key Provisions
The main operative sections of the Customs Act 1901, as related to Tariff Concession Orders (TCOs), are sections 269F, 269C, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must then decide whether the application meets the core criteria as set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the application meets these criteria, the CEO must issue a written order, the TCO, as per section 269P(3), effectively reducing the duty on the specified goods.
The Customs Act 1901 imposes several obligations on both the CEO and the applicants for a TCO. The CEO must ensure that the application for a TCO is valid and does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. Once the application is accepted, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as per section 269K(1). If no submissions are received, the CEO proceeds to make the TCO. The applicant must provide sufficient information to demonstrate that the goods in question are eligible for the concession, specifically that no substitutable goods are produced in Australia.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO can result in various legal consequences. If a person knowingly or recklessly provides false information to the CEO in support of a TCO application, they may face criminal penalties. Under section 286 of the Customs Act 1901, the maximum penalty for such an offence is a fine of 5,000 penalty units or imprisonment for five years, or both. Additionally, any misuse of a TCO or failure to comply with its terms could lead to further civil or criminal penalties as determined by the relevant authorities.
The explanatory statement for Tariff Concession Instrument No. 1025387 details that Murray Goulburn Cooperative Co Ltd applied for a TCO concerning specific bottle trolley loading machines on 7 June 2010. Following the CEO's satisfaction that the application met the core criteria, TCO No. 1025387 was issued on 30 August 2010, reducing the duty on these machines to free. This TCO was effective from the date of the application, 7 June 2010, and did not disadvantage any person or impose liabilities on anyone other than the Commonwealth. Importers of these goods can apply for a refund of duty on goods imported since the TCO's effective date, as per the Regulations.