EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113301
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.
Laminex Group Ltd applied for a TCO in respect of certain knife ring flaker machines on 21 April 2011.
Instrument
TCO No 1113301 was made on 11 July 2011. It declares that those certain knife ring flaker 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. 1113301 is taken to have come into force on 21 April 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 a scheme under which Tariff Concession Orders (TCOs) can be made, allowing for a lower rate of customs duty on certain goods. This scheme was introduced to address the problem of ensuring that Australian businesses do not face unnecessary tariffs on goods that are not produced domestically or for which no substitutable goods are available in the domestic market. Tariff Concession Instrument No. 1113301, introduced on 11 July 2011, was made in response to an application by Laminex Group Ltd for a TCO on certain knife ring flaker machines. The Chief Executive Officer of Customs determined that these machines qualified for a tariff concession as no substitutable goods were produced in Australia, resulting in a tariff rate of free for these machines, down from the general rate of 5%. This concession aims to support Australian businesses by potentially reducing their costs and making imported goods more affordable.
Scope and Application
The Customs Act 1901, under Part XVA, governs the process through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This legislation applies to applications for tariff concessions in respect of specific goods, ensuring that a lower rate of customs duty is applied if the CEO determines that the goods meet the criteria set out in the Act. The scope of this Act extends to any person who applies for a TCO in relation to goods, provided those goods are not specified in section 269SJ, which excludes certain goods from eligibility. The application of the Act is national, as it is a Commonwealth Act, thereby affecting all states and territories within Australia. The Act’s application can be extended or restricted through subordinate instruments, although the primary text does not detail these. Importantly, the Act does not disadvantage any person by affecting their rights as at the date of registration nor does it impose any liabilities on individuals in relation to actions taken before the registration of a TCO. The commencement of a TCO is deemed to be on the date the application is lodged, as outlined in subsection 269S(1).
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1113301 under the Customs Act 1901 (section 269F) allow the Chief Executive Officer of Customs (CEO) to grant a Tariff Concession Order (TCO) for goods that meet specific criteria. If an applicant submits a valid application and the CEO determines that no substitutable goods are produced in Australia, a TCO can be issued (section 269C). This TCO then applies a lower or free rate of customs duty to the specified goods, as outlined in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes several obligations on the parties involved. The CEO must accept and process applications for TCOs, ensuring that they meet the core criteria before issuing a written order (section 269F). The CEO is also required to publish a notice in the Gazette, inviting submissions from any interested parties regarding the application (subsection 269K(1)). In this case, no submissions were received, allowing the CEO to proceed with issuing the TCO. Importers of the goods affected by the TCO can apply for a refund of duty paid on those goods since the TCO's effective date, as stipulated in the Regulations (paragraph 126(1)(r)).
Failure to comply with the provisions of the Customs Act 1901 can result in civil and criminal consequences. The Act does not specify penalties for breaches related to TCOs; however, general penalties for breaches of customs regulations may apply. These can include fines and imprisonment for serious offences, with the exact penalties depending on the nature and severity of the breach. The CEO's decision-making process must adhere strictly to the Act's requirements to avoid any potential legal repercussions.