EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041432
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.
Casslis Pty Ltd applied for a TCO in respect of certain pressure forming machines on 08 September 2010.
Instrument
TCO No 1041432 was made on 06 December 2010. It declares that those certain pressure forming 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. 1041432 is taken to have come into force on 08 September 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 Australian Parliament, provides a framework for the administration of customs duties and related matters. The Act was introduced to address the need for a structured and efficient system to manage the import and export of goods, ensuring compliance with customs regulations and the appropriate collection of duties. One of the mechanisms within the Act is the scheme for Tariff Concession Orders (TCOs), which allows for the reduction or exemption of customs duty on specified goods under certain conditions. Tariff Concession Instrument No. 1041432, issued in 2010, is an example of this scheme in action, providing a zero rate of customs duty on certain pressure forming machines following an application by Casslis Pty Ltd. The policy objective of this particular TCO is to facilitate the importation of these machines by making them more affordable, thereby potentially supporting industrial activities and economic growth in relevant sectors.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty on specific goods, subject to certain criteria. A TCO can be applied for by any person in respect of goods, provided those goods are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. An application is deemed to meet the core criteria if, on the date it was lodged, there were no substitutable goods produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Once a TCO is issued, it comes into force on the date the application was lodged, and it does not affect any existing rights or impose any liabilities in respect of actions taken before its registration. Importers, however, can benefit by applying for a refund of duty on goods imported since the TCO's effective date. The application and issuance of TCOs are subject to the CEO's discretion and the provisions outlined in the Act and associated regulations.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1041432 under the Customs Act 1901 include sections 269C, 269F, and 269P. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C specifies the core criteria that must be met for an application to be considered valid, namely that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P(3) requires the CEO to issue a written TCO, declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations and requirements on both applicants and the CEO. Applicants, such as Casslis Pty Ltd in this case, must ensure their applications are valid under the criteria set out in section 269C, specifically that no substitutable goods are produced in Australia on the application date. The CEO is required to publish a notice in the Gazette (subsection 269K(1)) as soon as practicable after accepting an application as valid, inviting submissions from any interested parties. If no submissions are received, the CEO proceeds to make a TCO if the application meets the criteria. The TCO, once made, is deemed to have come into effect on the date the application was lodged (subsection 269S(1)).
In terms of offences and penalties, the Customs Act 1901 does not explicitly detail penalties for non-compliance with the TCO provisions. However, general provisions within the Act, including section 255, cover offences such as providing false information in an application or attempting to evade duty, which may attract criminal penalties. The consequences for failing to adhere to the requirements or committing an offence under the Act can include fines and imprisonment. While the specific maximum penalties for breaches under section 269 of the Act are not detailed in the explanatory statement, penalties for related offences can be severe, reflecting the seriousness with which the law treats non-compliance.
The Tariff Concession Instrument No. 1041432 grants significant benefits to importers by reducing the customs duty on certain pressure forming machines to zero, provided no substitutable goods are produced in Australia. This reduction is effective from the date the application was lodged, thereby ensuring that importers can benefit from the lower duty rate immediately. Additionally, the TCO does not impose any new liabilities on any person and does not adversely affect the rights of any person other than the Commonwealth, safeguarding the interests of those who have already imported goods before the TCO came into force. This legislative provision aims to facilitate trade by making certain imported goods more affordable, thus potentially stimulating economic activity in the relevant sector.