EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101417
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.
Martini Industries Pty Ltd applied for a TCO in respect of certain coating and laminating machines on 11 January 2011.
Instrument
TCO No 1101417 was made on 04 April 2011. It declares that those certain coating and laminating 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. 1101417 is taken to have come into force on 11 January 2011.
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 Tariff Concession Instrument No. 1101417 was enacted in 2011 under the Customs Act 1901. It was introduced to provide tariff concessions on certain goods, specifically certain coating and laminating machines, by reducing the customs duty rate from the general rate of 5% to free, thereby addressing the economic barrier for businesses importing these machines. This instrument was developed in response to an application by Martini Industries Pty Ltd, and it was enacted by the Chief Executive Officer of Customs following the satisfaction of the core criteria set out in the Act. The policy objective of this instrument is to facilitate the importation of goods that are not produced domestically, thus supporting industries reliant on imported machinery. The instrument ensures that the rights of existing importers are not adversely affected and allows them to apply for duty refunds on goods imported since the instrument's effective date.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of tariffs on imported goods, with specific provisions allowing for tariff concession orders (TCO) that may apply lower rates of duty on certain goods. In this context, Tariff Concession Instrument No. 1101417 applies to the particular case of certain coating and laminating machines, as applied for by Martini Industries Pty Ltd. The application of a TCO requires that the goods in question are not substitutable by any goods produced in Australia and that the application meets the core criteria as outlined in the Act. The geographic reach of this legislation is national, given the Customs Act 1901 is a Commonwealth Act. The TCO does not extend to affect any rights of persons other than the Commonwealth as at the date of registration and does not impose any liabilities on any person. The TCO is effective from the date the application was lodged, which in this case is 11 January 2011. The application process also involves public consultation, with an opportunity for submissions to be made regarding the TCO application, although in this instance, no submissions were received.
Key Provisions
The Customs Act 1901, through its Part XVA, establishes a scheme where Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (section 269F). An application for a TCO must be lodged by a person, and if the CEO determines that the application is not for goods specified in section 269SJ, they must evaluate whether it meets the core criteria set out in section 269C. This core criteria necessitates that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E, with 'substitutable goods' further explained in section 269B.
The obligations imposed by the Act on the parties involve ensuring that any application for a TCO is made in respect of goods that meet the core criteria. The CEO has a duty to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested party to submit any objections (subsection 269K(1)). Once the CEO is satisfied that the application meets the core criteria, they must make a written TCO declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as stipulated in subsection 269P(3).
Failure to comply with the provisions of the Act can result in civil or criminal consequences. However, the Explanatory Statement does not explicitly outline offences or penalties for breach of the TCO provisions. Instead, it notes that 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 in respect of anything done or omitted to be done before the date of registration. Importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.