EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1036902
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.
AJ Lucas Operations Pty Ltd applied for a TCO in respect of certain pipe tensioner machines on 11 August 2010.
Instrument
TCO No 1036902 was made on 08 November 2010. It declares that those certain pipe tensioner 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. 1036902 is taken to have come into force on 11 August 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. 1036902, enacted in 2010, pertains to the Customs Act 1901 and addresses the need to provide tariff concessions for certain specified goods. This legislative instrument was introduced to allow the Chief Executive Officer of Customs to grant tariff concessions on goods not produced in Australia, thereby encouraging importation of these goods by reducing or eliminating customs duty. The instrument was enacted by the Australian Government and aims to facilitate trade by providing economic benefits to importers of the specified goods. The instrument was effective from the date of the application, ensuring that the rights of importers are protected and that no new liabilities are imposed on any party.
Scope and Application
The Tariff Concession Instrument No. 1036902 under the Customs Act 1901 applies to specific pipe tensioner machines, which are the subject of an application by AJ Lucas Operations Pty Ltd. The Act, which is Commonwealth legislation, allows for the reduction or exemption of customs duty on goods through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. This particular TCO applies to goods that are not substitutable by products manufactured in Australia and have a prescribed duty rate listed in Schedule 4 to the Customs Tariff Act 1995. The order provides a tariff concession for these goods, reducing the general duty rate of 5% to free, effective from the date the application was lodged, 11 August 2010. The Act requires the CEO to publish a notice in the Gazette to invite submissions on the TCO application, although in this case, no submissions were received. The TCO does not affect the rights of any person adversely or impose any liabilities, and it allows for refunds of duty for importers of the specified goods since the effective date of the TCO.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 1036902 (section 269F) allow an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding specific goods. If the CEO is satisfied that the application is valid and does not pertain to goods listed in section 269SJ of the Customs Act 1901, the CEO must evaluate whether the application meets the core criteria outlined in section 269C. A TCO application is deemed to meet the core criteria if, on the date of the application, there were no substitutable goods produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If the CEO determines that the application meets these criteria, a written order (TCO) must be issued, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties or entities involve ensuring that any applications for a TCO are made in accordance with the stipulated criteria. The CEO has a duty to publish a notice in the Gazette after accepting a TCO application as valid, as per section 269K(1) of the Act. This notice invites any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. In this case, no submissions were received in response to the published notice, allowing the CEO to proceed with the TCO. Additionally, the Act ensures that the TCO does not disadvantage any person, other than the Commonwealth, or impose any liabilities on any person for actions taken before the date of registration.
The Act delineates consequences for breaches, although specific offences and penalties are not detailed within the explanatory statement provided. Generally, under the Customs Act 1901, any failure to comply with the provisions could result in civil or criminal penalties. These penalties might include fines or imprisonment, depending on the severity of the breach. The exact penalties would depend on the specific sections of the Customs Act 1901 that are contravened, which are not explicitly mentioned in the explanatory statement.