EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1051914
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.
GBC Scientific Equipment Australia applied for a TCO in respect of certain mineral sample melting and fusing burners on 25 November 2010.
Instrument
TCO No 1051914 was made on 28 February 2011. It declares that those certain mineral sample melting and fusing burners 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. 1051914 is taken to have come into force on 25 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 Australian Parliament to regulate the import and export of goods, including the imposition of customs duties. In addressing the need to provide tariff relief for certain imported goods, the Act, through its Part XVA, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. The Tariff Concession Instrument No. 1051914 was introduced on 28 February 2011 to provide a tariff concession for certain mineral sample melting and fusing burners, reducing their customs duty from 5% to free. This was in response to an application by GBC Scientific Equipment Australia, and after a review, the CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria set out in section 269C of the Act. The instrument aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force on 25 November 2010, without imposing any new liabilities on any person.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Act applies to any person who can apply for a TCO in respect of goods, provided that these goods are not specified in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The application process requires the CEO to determine if the application meets core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are satisfied, the CEO is mandated to make a TCO, specifying a lower rate of customs duty for the goods in question. The application of this Act extends to the entire Commonwealth of Australia, as it is a federal legislation. The Act does not specify any exclusions or exemptions other than those goods listed in section 269SJ, and it does not impose any liabilities on persons other than the Commonwealth. The application and enforcement of the Act may be further detailed through subordinate instruments, which could provide additional definitions or administrative procedures.
Key Provisions
The Customs Act 1901 contains a framework for the creation of Tariff Concession Orders (TCOs) under section 269F (1), allowing for lower rates of customs duty on specified goods. If an applicant submits a TCO application and the Chief Executive Officer (CEO) of Customs determines that the application is not in relation to goods excluded under section 269SJ, the CEO must then assess whether the application meets the core criteria outlined in section 269C. To meet these criteria, no substitutable goods, as defined in section 269D, can be produced in Australia in the ordinary course of business on the day the application was lodged.
The obligations imposed on the CEO under the Customs Act 1901 include ensuring that the application does not pertain to goods specified in section 269SJ and verifying that the core criteria in section 269C have been met. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO must also ensure that the TCO does not adversely affect the rights of any person or impose liabilities on any person in respect of actions taken before the TCO is registered, as stated in subsection 269S(1).
The Act does not explicitly outline offences, penalties, or consequences for breach of the TCO provisions. However, it is implied that any misuse or improper application of TCOs could potentially lead to legal consequences under the general provisions of the Customs Act 1901, which include penalties for fraud, misrepresentation, and other breaches of customs regulations. The maximum penalties for such offences can include substantial fines and imprisonment, depending on the severity of the breach.