EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1027548
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.
Australian Enviroblast Pty Ltd applied for a TCO in respect of certain wet abrasive blasting machines on 21 June 2010.
Instrument
TCO No 1027548 was made on 13 September 2010. It declares that those certain wet abrasive blasting 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. 1027548 is taken to have come into force on 21 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. 1027548, enacted under the Customs Act 1901, addresses the need for tariff concessions on certain imported goods, thereby providing relief to Australian businesses that rely on these goods. This instrument was introduced by the Chief Executive Officer of Customs in response to an application by Australian Enviroblast Pty Ltd for a Tariff Concession Order (TCO) on specific wet abrasive blasting machines. The policy objective is to provide a lower rate of customs duty on these goods by declaring them as eligible for the TCO, which in this case results in a duty-free status for the specified machines. This initiative ensures that Australian businesses can access necessary equipment without incurring prohibitive customs duties, thus facilitating trade and supporting industrial operations.
The enactment of this TCO follows the legislative framework established by Part XVA of the Customs Act 1901, which outlines the process for applying and granting tariff concessions. The CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for the concession. The TCO, which came into effect on the date the application was lodged, benefits importers by allowing them to apply for a refund of duty paid on the specified goods imported since the concession was applied. Importantly, the TCO does not adversely affect the rights of any person or impose new liabilities, thereby maintaining legal clarity and fairness in its implementation.
Scope and Application
The Tariff Concession Instrument No. 1027548 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO), which in this case are certain wet abrasive blasting machines. The Act allows for the Chief Executive Officer of Customs to make a TCO if certain conditions are met, including that no substitutable goods are produced in Australia in the ordinary course of business. This legislation is relevant to the entity that applied for the concession, Australian Enviroblast Pty Ltd, and to importers of the specified goods. The geographic reach of this legislation is national, applying across Australia under the Commonwealth's legislative powers. There are specific exclusions under section 269SJ of the Act, which details the goods that cannot be subject to a TCO. The TCO itself does not impose any new liabilities and does not affect the rights of persons as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken prior to the registration date.
Key Provisions
The main operative sections of the Customs Act 1901 as amended by Tariff Concession Instrument No. 1027548, include sections 269C, 269B, 269E, 269F, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. If the application meets the core criteria outlined in section 269C, the CEO must make a TCO, as stipulated in section 269P(3). These sections provide the framework for assessing applications and granting concessions on customs duty rates. Section 269B defines key terms such as 'goods produced in Australia,' 'ordinary course of business,' and'substitutable goods,' which are critical for determining the eligibility of goods for a TCO.
The Act imposes specific obligations on the parties involved. The applicant must ensure their application meets the core criteria, meaning no substitutable goods should be produced in Australia in the ordinary course of business on the day the application is lodged. The CEO is obligated to evaluate the application against these criteria and decide whether to grant the TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made, as outlined in subsection 269K(1). The CEO is also responsible for ensuring that the TCO does not affect the rights of any person, other than the Commonwealth, in a way that disadvantages them or imposes liabilities in relation to actions taken before the registration date.
The Customs Act 1901 outlines various consequences for breaches of its provisions. The Act does not specify particular offences related to the TCO process but refers to general legal consequences for non-compliance with customs regulations. If an entity fails to comply with the terms of a TCO or engages in fraudulent activities to obtain a concession, they may face penalties under the Customs Act. These could include fines or imprisonment, depending on the severity of the breach. For example, providing false information in an application could lead to criminal charges, while failing to adhere to the terms of a granted TCO might result in financial penalties. The Act ensures that any person found in breach of its provisions can be subject to appropriate legal action, reinforcing the importance of compliance.