EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1051501
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.
Hooker Cockram Projects Limited applied for a TCO in respect of certain continuous thermal effluent decontamination machines on 23 November 2010.
Instrument
TCO No 1051501 was made on 28 February 2011. It declares that those certain continuous thermal effluent decontamination 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. 1051501 is taken to have come into force on 23 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 was enacted by the Parliament of Australia and provides the framework for the regulation of customs and excise in Australia. One of its components is Part XVA, which establishes a scheme for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs (CEO). The 2011 Tariff Concession Instrument No. 1051501 was introduced to address the specific need for tariff concessions on certain continuous thermal effluent decontamination machines. This was in response to an application by Hooker Cockram Projects Limited, who sought a reduction in customs duty on these machines. The CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria under section 269C of the Act. Consequently, the CEO issued TCO No. 1051501, which declared that the specified machines were subject to a duty rate of free, down from the general rate of 5%. This tariff concession was effective from the date of the application, 23 November 2010, and did not impose any liabilities on any person nor affect the rights of non-Commonwealth persons as at the date of registration.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the process by which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs, impacting the application of customs duties on certain imported goods. The Act applies to entities and individuals seeking tariff concessions for specific goods that are not produced in Australia and for which no substitutable goods are available domestically. This legislative framework provides a mechanism for reducing the rate of customs duty on goods that meet the criteria set forth in the Act, provided they are not those specified in section 269SJ which are ineligible for tariff concessions. The geographic scope of this legislation is national, applying across Australia under the Commonwealth's authority. The application of the Act is not restricted by state or territory boundaries, ensuring a uniform approach to tariff concessions. The Act also allows for the extension or restriction of its application through subordinate instruments, thereby providing flexibility in its implementation. The Explanatory Statement for Tariff Concession Instrument No. 1051501 illustrates this process in action, detailing how Hooker Cockram Projects Limited successfully applied for tariff concessions on continuous thermal effluent decontamination machines, leading to a reduction in customs duty from the general rate of 5% to free duty.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1051501 (section 269C) require the Chief Executive Officer (CEO) of Customs to consider applications for Tariff Concession Orders (TCOs). Section 269P(3) states that if the CEO is satisfied that an application meets the core criteria, they must make a written TCO. Section 269SJ limits the application to goods that are not specified as ineligible. Section 269D defines "goods produced in Australia," section 269E defines "ordinary course of business," and section 269F outlines the application process. The TCO specifies that continuous thermal effluent decontamination machines are subject to a lower rate of customs duty, free instead of the general 5%.
The Act imposes several obligations on the parties involved. Firstly, applicants such as Hooker Cockram Projects Limited must ensure their applications are valid and meet the core criteria (section 269C). The CEO is required to evaluate applications against these criteria and decide whether to issue a TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made (section 269K(1)). The CEO did not receive any submissions for TCO No. 1051501, which suggests that the application met all requirements without opposition.
The Act also outlines potential consequences for non-compliance or breaches. While the Explanatory Statement does not specify criminal offences or civil penalties for failing to comply with the Act, it does state that the TCO does not affect the rights of a person or impose liabilities on any person except the Commonwealth (subsection 269S(1)). However, the general legal framework of the Customs Act 1901 might impose penalties for any misuse of the TCO or fraudulent claims, typically involving fines or imprisonment as outlined in the broader customs legislation. The specific penalties would depend on the nature and severity of the breach.
In summary, Tariff Concession Instrument No. 1051501 simplifies the customs duty process for specific continuous thermal effluent decontamination machines by applying a zero-rate duty, provided the CEO determines that no substitutable goods are produced in Australia. The Act mandates that the CEO evaluates applications and consults with the public, although no submissions were received for this particular TCO. The legal framework ensures that the TCO benefits importers by lowering their duty rates without imposing new liabilities on any party.