EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1038760
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.
Schaefer Systems International Pty Limited applied for a TCO in respect of certain storage and retrieval systems on 19 August 2010.
Instrument
TCO No 1038760 was made on 17 November 2010. It declares that those certain storage and retrieval systems 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. 1038760 is taken to have come into force on 19 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 Customs Act 1901 was enacted by the Australian Parliament to provide a comprehensive framework for the administration of customs and excise duties. This legislation allows for the implementation of Tariff Concession Orders (TCOs) to reduce customs duty on specific goods, facilitating trade and benefiting certain sectors by making imported goods more affordable. TCO No. 1038760, issued under this Act, was introduced to address a specific need identified by Schaefer Systems International Pty Limited for lower duty rates on certain storage and retrieval systems. The instrument was made on 17 November 2010 after the CEO of Customs determined that no substitutable goods were produced in Australia, thereby meeting the core criteria outlined in the Act. The policy objective of this measure is to support industry by reducing the cost of importing particular goods, thereby encouraging trade and potentially stimulating economic activity within the relevant sector.
Scope and Application
The Tariff Concession Instrument No. 1038760, under the Customs Act 1901, applies specifically to certain storage and retrieval systems which Schaefer Systems International Pty Limited applied for on 19 August 2010. The instrument, effective from the date of the application, grants tariff concessions to these goods by exempting them from the general rate of duty, which is 5%, making the rate of duty for these goods free. This applies to the goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument is subject to the core criteria outlined in section 269C of the Act, which mandates that the goods must not have substitutable equivalents produced in Australia at the time of application. The scope of this legislation is limited to the specific goods mentioned in the application and does not extend to other goods or industries unless similarly applied for and approved.
Geographically, the application and effect of this Tariff Concession Order fall within the jurisdiction of the Commonwealth of Australia, as governed by the Customs Act 1901. There are no exclusions or exemptions specified in the document aside from those inherently defined by the core criteria under the Act. The instrument does not disadvantage any existing rights of parties other than the Commonwealth and does not impose any new liabilities. It is noteworthy that the order came into force on the day the application was lodged, aligning with the provisions of subsection 269S(1) of the Act.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically Part XVA, establish a framework for the creation of Tariff Concession Orders (TCOs) through section 269F. This section allows individuals to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the application is not disqualified under section 269SJ, the CEO must assess whether it meets the core criteria set out in section 269C. This assessment hinges on whether substitutable goods were being produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO finds that no such substitutable goods exist, they are mandated to issue a written order, or TCO, specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. This order effectively applies a lower rate of customs duty, or even makes it free, to the specified goods.
The obligations imposed by the Act on the parties it governs are centred around the application and assessment process for TCOs. An applicant must ensure that their application is valid and does not pertain to goods listed in section 269SJ. Once a TCO application is accepted, the CEO has the obligation to publish a notice in the Gazette, inviting any interested party to submit objections if they believe the TCO should not proceed. Additionally, the CEO must meticulously verify the core criteria outlined in section 269C before issuing a TCO. This includes confirming that no substitutable goods were being produced in Australia on the application date, as defined by sections 269D, 269E, and 269F.
Failure to comply with the provisions of the Customs Act 1901 can result in significant consequences. While the explanatory statement does not detail specific offences, penalties, or consequences for breach, the general framework of the Act implies that non-compliance could lead to civil or criminal penalties. The exact nature of these penalties would depend on the specific breach and the provisions of other related legislation. However, it is reasonable to infer that breaches involving the improper application or misuse of a TCO could result in fines or other sanctions, as typically enforced under Australian law for similar infractions. The absence of specific penalties in the explanatory statement does not diminish the potential seriousness of non-compliance.