EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1047642
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.
Hella Australia Pty Ltd applied for a TCO in respect of certain vacuum pumps on 25 October 2010.
Instrument
TCO No 1047642 was made on 12 January 2011. It declares that those certain vacuum pumps 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. 1047642 is taken to have come into force on 25 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 Customs Act 1901, enacted by the Parliament of Australia, provides for a scheme whereby Tariff Concession Orders (TCOs) can be made to apply lower rates of customs duty to certain goods. This mechanism was introduced to address the problem of ensuring that Australian businesses are not unduly burdened by customs duties, particularly in cases where no equivalent goods are produced domestically, thereby fostering a competitive and fair trading environment. The Tariff Concession Instrument No. 1047642, made under this Act on 12 January 2011, specifically addresses an application by Hella Australia Pty Ltd for a concession on certain vacuum pumps. The instrument was enacted following a determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, thus satisfying the core criteria outlined in the Act. This instrument is designed to alleviate the financial burden on importers and aligns with the policy objective of supporting Australian industry by reducing costs associated with customs duties.
Scope and Application
The Tariff Concession Instrument No. 1047642, made under the Customs Act 1901, applies to certain vacuum pumps that are imported into Australia, with the intent of providing tariff concessions to the applicant, Hella Australia Pty Ltd. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to goods specified in the order, provided the application meets the core criteria outlined in section 269C of the Act. This includes ensuring that no substitutable goods are produced in Australia at the time of the application. In this instance, the CEO determined that the application met the core criteria, as no substitutable vacuum pumps were produced in Australia, and thus a TCO was issued, effective from the date of the application on 25 October 2010. The TCO provides a free duty rate on the specified vacuum pumps, as opposed to the general rate of 5%. The geographic reach of this Act is national, applying to all imports into Australia, and it does not impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 1047642, made under the Customs Act 1901, provides for a concession in the customs duty on certain vacuum pumps imported into Australia. According to section 269P(3) of the Customs Act, the Chief Executive Officer of Customs (CEO) must make a written order (Tariff Concession Order, or TCO) when satisfied that the application for tariff concession meets the core criteria. Section 269C of the Act stipulates that these criteria are met if no substitutable goods were produced in Australia on the day the application was lodged.
The obligations imposed by the Act on parties involve ensuring that the application for tariff concession is valid and meets the core criteria set out in section 269C. The CEO must assess whether the application for a TCO is valid and whether it complies with the core criteria, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged. Furthermore, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made, as per subsection 269K(1) of the Act. In this case, the CEO published a notice inviting submissions but did not receive any objections, indicating no opposing views to the concession.
The Act provides for civil and criminal consequences for breaches of its provisions. Section 274 of the Customs Act details the penalties for contraventions of the Act, which may include fines and imprisonment. However, the Explanatory Statement does not specify any particular offences, penalties, or consequences for breaching the terms of this TCO. It is important to note that the absence of submissions in response to the notice published by the CEO suggests compliance with the Act's requirements. Therefore, any breach of the TCO or related provisions would likely incur penalties as outlined in the broader Customs Act, which could include fines and imprisonment depending on the severity of the breach.