EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113344
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.
JMP Holdings Pty Ltd applied for a TCO in respect of certain meat processing machines on 21 April 2011.
Instrument
TCO No 1113344 was made on 18 July 2011. It declares that those certain meat processing 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. 1113344 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 Tariff Concession Instrument No. 1113344 was enacted under the Customs Act 1901 to provide tariff concessions for certain goods, specifically meat processing machines in this instance. This instrument addresses the gap where Australian businesses may require imported goods for which no suitable domestic alternatives exist, allowing for a more competitive market and potentially fostering innovation and efficiency within the industry. The instrument was introduced by the Chief Executive Officer of Customs, who evaluated the application from JMP Holdings Pty Ltd and determined that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in section 269C of the Act. The policy objective appears to be to support Australian businesses by reducing the cost of importing essential goods, thus facilitating economic growth and efficiency without imposing any new liabilities on individuals or entities.
The instrument was published in the Gazette, inviting any interested parties to lodge submissions against the concession, although none were received. The tariff concession order came into force on the date the application was lodged, 21 April 2011, ensuring that importers could benefit from the reduced duty rates retroactively from that date. This approach protects the rights of importers and avoids disadvantaging any party by imposing liabilities for actions taken before the instrument's registration.
Scope and Application
The Customs Act 1901 applies to all individuals, entities, and industries involved in the importation of goods into Australia, as well as to the conduct and transactions related to these imports. Specifically, the Act governs the process by which Tariff Concession Orders (TCOs) can be applied for and granted, which allows for a lower rate of customs duty on specified goods. The application process is managed by the Chief Executive Officer of Customs (CEO), who must determine if the application meets the core criteria, which include the absence of substitutable goods produced in Australia. The geographic reach of the Act is national, as it applies to all imports into Australia. The Act also allows for the extension or restriction of its application through subordinate instruments, such as the Customs Tariff Act 1995, which sets out the tariff rates applicable to different goods. The explanatory statement notes that the TCO does not affect existing rights or impose liabilities on any person in relation to actions taken prior to the order's registration.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1113344 under the Customs Act 1901 (sections 269C, 269F, 269P(3) and 269S) allow for the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) when certain conditions are met. Section 269F provides the framework for applications to be made for a TCO, whereas section 269C outlines the core criteria that must be satisfied for the CEO to approve such an application, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must issue a written order declaring the goods in question as subject to the TCO. Finally, section 269S dictates that the TCO is considered to come into force on the day the application was lodged, not the day it is approved.
The obligations imposed by this legislation on the parties involved, particularly the CEO, include the responsibility to assess applications for TCOs against the specified criteria (section 269C). The CEO must also ensure that a public notice is published in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). Additionally, the CEO must refrain from making a TCO for goods specified in section 269SJ of the Act. Importers, on the other hand, have the right to apply for a refund of duty on goods imported since the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various civil and criminal consequences. For instance, if an entity or individual deliberately contravenes the provisions concerning the issuance or application of TCOs, they may face penalties as outlined in the Customs Act and associated regulations. The maximum penalties can include substantial fines and, in more severe cases, imprisonment. The exact nature and severity of the penalties would depend on the specific breach and the provisions of the Customs Act and other relevant legislation at the time of the breach.