EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101670
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.
Southern Engineering Services Pty Ltd applied for a TCO in respect of certain positive displacement pumps on 13 January 2011.
Instrument
TCO No 1101670 was made on 11 April 2011. It declares that those certain positive displacement pumps 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. 1101670 is taken to have come into force on 13 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties. It includes a scheme under which Tariff Concession Orders (TCOs) can be made, allowing for reduced customs duty rates on certain goods. The Tariff Concession Instrument No. 1101670 was introduced to address a specific application from Southern Engineering Services Pty Ltd for tariff concessions on certain positive displacement pumps. The Chief Executive Officer of Customs (CEO) assessed that no substitutable goods were produced in Australia for these pumps, thereby satisfying the core criteria for a TCO. Consequently, the Instrument declares that these pumps are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. This initiative aims to benefit importers by potentially allowing them to claim refunds on duties paid on these goods since the effective date of the TCO, 13 January 2011, while ensuring no adverse impact on existing rights or liabilities of any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) which allow for a reduction or exemption in customs duty for specified goods, provided certain criteria are met. This legislative mechanism applies to any person or entity seeking a concession on customs duty for goods, contingent upon the absence of substitutable goods produced in Australia. The application of this Act is national, extending across all states and territories within Australia, as it is a Commonwealth Act. It is important to note that certain goods, as outlined in section 269SJ of the Act, are ineligible for tariff concessions. Additionally, the application process includes a requirement for the Chief Executive Officer of Customs to publish a notice in the Gazette, inviting submissions from interested parties; however, the absence of such submissions does not preclude the CEO from proceeding with the concession if the application meets the core criteria. The Tariff Concession Instrument No. 1101670, specifically concerning positive displacement pumps, exemplifies the application of this Act by providing duty-free treatment to the specified goods, effective from the date of application.
Key Provisions
The Tariff Concession Instrument No. 1101670, under the Customs Act 1901, pertains to the granting of tariff concessions on certain goods. Specifically, section 269F of the Act allows for applications to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO determines that the application meets the core criteria, a TCO can be issued, effectively reducing the customs duty rate on the specified goods. In this case, certain positive displacement pumps are the subject of TCO No. 1101670, which was made on 11 April 2011, declaring that these goods are subject to a zero rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily centred around the application process and the CEO's decision-making responsibilities. Section 269C of the Act stipulates that for a TCO application to meet the core criteria, it must be established that no substitutable goods are produced in Australia at the time the application is lodged. The CEO is required to make a written order if the application meets these criteria, as per subsection 269P(3) of the Act. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. However, in this instance, no submissions were received.
The Act also delineates the consequences for non-compliance or breaches. While the explanatory statement does not explicitly outline criminal or civil penalties for breaches related to TCOs, it is reasonable to infer that breaches of customs regulations generally may be subject to penalties under the Customs Act 1901 or the Crimes Act 1914. Such penalties could include fines and imprisonment, depending on the severity of the breach. It is essential for parties to adhere to the requirements set forth in the Act to avoid any adverse legal consequences.
Overall, TCO No. 1101670 effectively reduces the duty on certain positive displacement pumps and ensures that the rights of importers are not adversely affected. The legislative framework ensures that the process is transparent and allows for public input, while the commencement date of 13 January 2011 ensures that the tariff concessions apply from the date of the application.