EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105007
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.
Best & Less Pty Ltd applied for a TCO in respect of certain bi-directional conveyor belt parcel sorter on 04 February 2011.
Instrument
TCO No 1105007 was made on 02 May 2011. It declares that those certain bi-directional conveyor belt parcel sorter 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. 1105007 is taken to have come into force on 04 February 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 the framework for the management of customs duties and related tariffs. One of the gaps this legislation addresses is the potential for tariff concessions to stimulate economic activity by reducing the cost of importing certain goods. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty on particular goods under certain conditions. The policy objective behind this is to encourage the importation of goods that are not produced domestically, thereby supporting trade and potentially benefiting consumers through lower prices. Instrument No. 1105007, issued on 2 May 2011, exemplifies this process by granting a tariff concession on certain bi-directional conveyor belt parcel sorters, reducing their duty rate from 5% to free, contingent on the absence of substitutable goods produced in Australia. This measure aims to enhance competitiveness and operational efficiency for businesses relying on such equipment.
Scope and Application
The Tariff Concession Instrument No. 1105007 under the Customs Act 1901 applies to Best & Less Pty Ltd, specifically for their bi-directional conveyor belt parcel sorters. This instrument allows for a lower rate of customs duty on these goods, which are now subject to a concessional rate of duty as specified by the instrument. The instrument was issued by the Chief Executive Officer of Customs after determining that the application met the core criteria under section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. The instrument extends its application across the Commonwealth of Australia, thereby affecting the customs duty rates applicable to the specified goods imported into Australia. There are no exclusions or exemptions detailed in the explanatory statement, and the application of this instrument is governed by the provisions outlined in the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The main operative sections of this legislation pertain to the creation and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. The CEO must then assess whether the application meets the core criteria set out in section 269C. If the CEO determines that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269P(3), the CEO is required to make a written order (the TCO) that specifies the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by the Act on the parties involved are primarily on the CEO. The CEO must publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe the TCO should not be made, as per subsection 269K(1). In this instance, the CEO did not receive any submissions. The Act also requires the CEO to ensure 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 (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration.
There are no specific offences, penalties, or civil/criminal consequences mentioned for breach of the provisions of this TCO. However, general compliance with the Customs Act 1901 and the associated regulations is expected. Failure to comply with customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. It is important to note that the TCO itself does not impose any liabilities on any person, as per the provisions of the Act.