EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1043534
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.
Como Glasshouse Unit Trust applied for a TCO in respect of certain glasshouse pumping system on 23 September 2010.
Instrument
TCO No 1043534 was made on 20 December 2010. It declares that those certain glasshouse pumping system 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. 1043534 is taken to have come into force on 23 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, outlines a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs to lower customs duty rates on specified goods. This legislative framework was introduced to address the need for a streamlined process to reduce customs duties on imported goods that have no Australian-produced substitutes, thereby supporting industries that may be at a competitive disadvantage due to the lack of local production. Instrument TCO No. 1043534, made on 20 December 2010, is an example of this process, granting a tariff concession for certain glasshouse pumping systems. This instrument was enacted after the CEO confirmed that no substitutable goods were produced in Australia and followed the statutory requirement to publish a notice in the Gazette, inviting submissions which, in this case, were not received. The policy objective is to enhance economic efficiency and competitiveness by ensuring that Australian industries are not unduly burdened by high customs duties on goods for which there is no local alternative.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on specified goods. This legislation applies to any person or entity that imports goods into Australia, allowing them to apply for a TCO if the goods are not specified in section 269SJ of the Act and meet the core criteria outlined in section 269C. These criteria include the condition that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F. The Act extends its reach nationally, with the CEO having the authority to issue TCOs that apply to all states and territories within the Commonwealth. The application process involves publishing a notice in the Gazette and considering any submissions received; however, in the case of TCO No. 1043534, no submissions were received. This TCO was made effective from the date the application was lodged, 23 September 2010, and it benefits importers by potentially allowing them to claim a refund of duty on goods imported since that date, without imposing any new liabilities on individuals or entities.
Key Provisions
The main operative sections of the Customs Act 1901 (section 269C and 269P) establish the criteria and process for the Chief Executive Officer of Customs (CEO) to consider when making a Tariff Concession Order (TCO). Section 269C sets out the core criteria that must be satisfied for a TCO application to be considered. It mandates that, on the day the application is lodged, no substitutable goods can be produced in Australia in the ordinary course of business. Section 269P(3) requires the CEO to make a written order if the application meets the core criteria, specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, which dictates the applicable duty rate. Tariff Concession Instrument No. 1043534 applies these provisions to certain glasshouse pumping systems, establishing a zero rate of customs duty.
The Act imposes specific obligations and requirements on both the CEO and applicants for a TCO. For the CEO, these include ensuring that the application complies with section 269SJ, which excludes certain goods from being subject to a TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties if they consider the TCO should not be made. For applicants, the primary requirement is to lodge a valid application that meets the core criteria stipulated in section 269C. The CEO must then determine whether the application satisfies these criteria before making a TCO.
Breaching the conditions of a TCO or failing to comply with the Act's requirements can lead to significant consequences. While the explanatory statement does not specify offences directly, non-compliance with the Act's provisions could potentially lead to civil or criminal penalties. For instance, incorrect classification of goods or fraudulent claims for tariff concessions could result in penalties under the Customs Act, including fines and potential criminal charges. However, the exact penalties are not detailed in the explanatory statement and would depend on the specific nature and severity of the breach.