EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1050696
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.
Dematic Pty Ltd applied for a TCO in respect of certain spiral conveyors on 16 November 2010.
Instrument
TCO No 1050696 was made on 07 February 2011. It declares that those certain spiral conveyors 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. 1050696 is taken to have come into force on 16 November 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, establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply reduced rates of customs duty to certain goods, provided they meet specified criteria. One such criterion, outlined in section 269C of the Act, is that no substitutable goods are produced in Australia in the ordinary course of business. This ensures that tariff concessions are granted to support industries that do not have domestic alternatives. In line with the Act, Tariff Concession Instrument No. 1050696 was issued on 7 February 2011, declaring that certain spiral conveyors, as applied for by Dematic Pty Ltd on 16 November 2010, qualify for a tariff concession, reducing the duty rate from the general 5% to free. The process involved publishing a notice in the Gazette and inviting submissions, though none were received. This instrument aims to benefit importers by potentially allowing them to apply for refunds of duty on these goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCOs), which are administered by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking a reduction in customs duty on specific goods, provided these goods are not prohibited by section 269SJ of the Act and meet the core criteria set out in section 269C. The TCO process is initiated when an applicant submits a request to the CEO, who then evaluates the application against the stipulated criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F. Once the CEO determines that the application is valid, a TCO is issued, granting tariff concessions on the specified goods as outlined in Schedule 4 of the Customs Tariff Act 1995. The geographic scope of the Act is national, with the CEO's decisions impacting all Australian territories. The application of the TCO is subject to certain exclusions and thresholds, and it does not affect existing rights or impose liabilities on any person other than the Commonwealth. The TCO in question, No. 1050696, was registered on 16 November 2010, and it benefits importers by allowing them to apply for duty refunds on goods imported since the effective date of the concession.
Key Provisions
The Tariff Concession Instrument No. 1050696, under the Customs Act 1901, establishes a tariff concession order (TCO) for certain spiral conveyors, as applied by Dematic Pty Ltd. Section 269F allows a person to apply for a TCO for goods, subject to approval by the Chief Executive Officer (CEO) of Customs. If the CEO determines that the application meets the core criteria outlined in section 269C, they must make a written order. This order, as seen in TCO No. 1050696, declares that the specified goods are subject to a reduced rate of duty, in this case, from a general rate of 5% to free duty.
The obligations under the Act for the parties involved include the requirement for the CEO to assess applications against the core criteria, which involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied with the application, they must issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as per section 269K(1). This process ensures transparency and provides an opportunity for objections to be raised.
In terms of consequences for non-compliance or breach, the Act does not explicitly detail specific offences or penalties for failing to comply with the TCO provisions. However, the failure to meet the core criteria or the improper issuance of a TCO could potentially lead to legal challenges, with the aggrieved party having recourse to judicial review under the Administrative Decisions (Judicial Review) Act 1977. Moreover, any misuse or fraud in the application process could attract criminal penalties under other sections of the Customs Act 1901, such as section 237, which deals with fraudulent conduct. The maximum penalties for such offences can include substantial fines and imprisonment, depending on the severity and intent behind the breach.