EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1045126
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.
Laminex Group applied for a TCO in respect of certain laminating machines on 06 October 2010.
Instrument
TCO No 1045126 was made on 10 January 2011. It declares that those certain laminating 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. 1045126 is taken to have come into force on 06 October 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. 1045126, enacted in 2011, is a legislative instrument under the Customs Act 1901 designed to facilitate tariff concessions for specific goods. This instrument addresses the need for a streamlined process to provide tariff relief to importers of certain goods, particularly in cases where no substitutable goods are produced in Australia. The Customs Act 1901, enacted by the Australian Parliament, provides a framework for administering customs duties and other import charges. The policy objective behind this instrument is to support Australian industries by ensuring that imported goods, for which there are no locally produced alternatives, benefit from reduced customs duty rates. This instrument allows the Chief Executive Officer of Customs to issue Tariff Concession Orders, which can significantly reduce or eliminate customs duties on specified goods, thereby making them more competitive in the Australian market.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty on specific goods. This Act applies to any person or entity seeking a reduction in customs duty on goods that are not explicitly barred by section 269SJ and meet the core criteria set out in section 269C. The application process requires the CEO to ascertain that no substitutable goods are produced in Australia at the time of application, with definitions for key terms provided in sections 269D, 269E, and 269F. Once an application meets these criteria, a TCO is issued under section 269P(3), with the concession effective from the date of application submission, as outlined in section 269S(1). The TCO does not retroactively affect existing rights or impose new liabilities on persons other than the Commonwealth, ensuring that importers can benefit from duty refunds for imports since the TCO's effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 1045126, made under the Customs Act 1901, provide for the application and determination of tariff concession orders (TCO) (section 269F). The instrument declares that certain laminating machines are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, with a rate of duty set at free, instead of the general rate of 5% (section 269P(3)). This concession is effective from the date the application was lodged, which is 06 October 2010 (subsection 269S(1)). The instrument does not affect the rights of any person other than the Commonwealth, ensuring that there are no disadvantages or liabilities imposed on individuals or entities due to actions taken before the date of registration (subsection 269S(2)).
The obligations imposed on parties by this legislation primarily rest with the Chief Executive Officer of Customs (CEO). The CEO must determine whether a TCO application meets the core criteria, which involves ensuring that no substitutable goods are produced in Australia on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a tariff concession (subsection 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may object to the making of the TCO (subsection 269K(1)). In this case, the CEO did not receive any submissions in response to the published notice.
In terms of consequences for breach, the Act does not explicitly detail offences, penalties, or civil/criminal consequences for failing to comply with the provisions of a TCO. However, the general principles of the Customs Act 1901 would apply, where breaches of customs regulations could result in penalties under various sections of the Act. These penalties can include fines and, in serious cases, imprisonment. The specific penalties would depend on the nature and severity of the breach, as well as any relevant regulations or subsidiary legislation that may provide further detail.