EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1053531
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.
Robert Bosch Aust Pty Ltd applied for a TCO in respect of certain diode potting machines on 8 December 2010.
Instrument
TCO No 1053531 was made on 7 March 2011. It declares that those certain diode potting 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. 1053531 is taken to have come into force on 8 December 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 Australian Parliament, establishes a framework for the imposition of customs duties on imported goods. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on specified goods. This mechanism was introduced to address gaps in the duty structure that might hinder certain industries from accessing competitively priced goods essential for their operations. Tariff Concession Instrument No. 1053531 was made under this Act on 7 March 2011, following an application by Robert Bosch Aust Pty Ltd for a TCO on certain diode potting machines. The CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria for the concession. As a result, the instrument declared that the specified machines are subject to a free rate of duty, down from the general rate of 5%. This concession is intended to benefit importers by potentially allowing them to claim refunds for duties paid on imports of these machines since the TCO is deemed to have come into force on the date of the application, 8 December 2010.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to entities or individuals who seek to import goods that qualify for a reduced rate of customs duty through a TCO. The application process is available for any goods, except those specified in section 269SJ of the Act, which cannot be subject to a TCO. The core criteria for approval of a TCO application include the absence of substitutable goods produced in Australia on the day the application was lodged. This ensures that the concession is granted when there is no domestic production that could be an alternative to the imported goods. The geographic reach of the Act is national, as it pertains to imports into Australia. The TCOs can extend or restrict their application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the applicable tariff items. Once a TCO is made, it is retroactive to the date the application was lodged, affecting the rights of importers beneficially by potentially allowing them to apply for a refund of duty on imported goods since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1053531, made under the Customs Act 1901, are sections 269C, 269B, 269D, 269E, and 269P. Section 269C establishes the core criteria that must be met for a Tariff Concession Order (TCO) to be granted. This includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are essential for determining the eligibility of the goods in question. Section 269D further clarifies the meaning of "goods produced in Australia," while section 269E explains what is meant by "ordinary course of business." Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be issued.
The obligations and requirements imposed by this Act on the parties involved primarily revolve around the application and assessment process for TCOs. The Chief Executive Officer of Customs (CEO) must ensure that any TCO application is assessed against the core criteria outlined in the Act. This involves verifying that no substitutable goods are produced in Australia on the application date. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted. In this instance, the CEO received no objections, facilitating the issuance of TCO No. 1053531.
In terms of breaches and potential consequences, the Act does not explicitly outline specific offences or penalties for failing to comply with the requirements of a TCO. However, any non-compliance with the customs duties as set out in the TCO or the Customs Act 1901 could lead to legal consequences. For example, the importation of goods without proper duty payment or misclassification of goods could result in penalties under the Customs Act. These penalties can include fines and, in severe cases, criminal charges. The exact penalties would depend on the specific breach and the discretion of the courts.
Overall, the Tariff Concession Instrument No. 1053531 facilitates the reduction or elimination of customs duties on specific goods, provided they meet the eligibility criteria. The obligations lie with the CEO to correctly assess and issue TCOs, while the rights of importers are enhanced, allowing them to claim refunds on duties paid prior to the TCO's effective date. Any failure to comply with the Act's provisions could result in civil or criminal penalties, depending on the severity of the breach.