EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1114653
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.
BGC Australia Pty Ltd applied for a TCO in respect of certain earth and/or mineral mixing machines on 10 May 2011.
Instrument
TCO No 1114653 was made on 01 August 2011. It declares that those certain earth and/or mineral mixing 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. 1114653 is taken to have come into force on 10 May 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, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These TCOs aim to address the problem of applying reduced customs duty rates to certain goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. The Customs Act 1901 provides the Chief Executive Officer of Customs the authority to make these orders, which came into effect with the introduction of the Customs Tariff Act 1995. The policy objective is to facilitate trade by reducing the cost of importing specific goods, thereby encouraging their availability and use in Australia. For example, in response to an application by BGC Australia Pty Ltd, Tariff Concession Order No. 1114653 was enacted, granting free duty on certain earth and/or mineral mixing machines, effective from 10 May 2011.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. These TCOs apply to specific goods for which a lower rate of customs duty is specified. The Act applies to any person who may apply to the CEO for such a concession in respect of goods, provided those goods are not specified in section 269SJ as ineligible. The application process requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO determines that the application meets the criteria, they must issue a written order, which becomes effective from the date the application was lodged. The scope of the Act is national, applying across Australia and potentially affecting the rights of importers who can apply for duty refunds on goods imported from the date the TCO comes into force. 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 for actions taken prior to the registration of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, as applied to Tariff Concession Orders (TCOs), include sections 269C, 269B, 269D, 269E, 269F, 269P, 269S, and 269SJ. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO, which is subject to the core criteria outlined in section 269C. This means that a TCO will only be granted if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269B, 269D, and 269E respectively. If the CEO is satisfied that the application meets the core criteria, they must make a written order (section 269P(3)), which specifies that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, applicants for a TCO must ensure that their application meets the core criteria specified in the Act. This includes demonstrating that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The CEO has the responsibility of assessing the application against these criteria and making a decision accordingly. Additionally, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made.
Failing to comply with the requirements set out in the Customs Act 1901 can result in various consequences. While the Act does not explicitly state offences or penalties for breaches, it is likely that non-compliance could be treated as a breach of the Act, potentially leading to enforcement actions by the CEO or other relevant authorities. The consequences might include the imposition of fines, legal proceedings, or other administrative actions. For example, if an applicant submits a false application, they could face criminal charges for fraud or other related offences, which could result in significant penalties. The exact penalties would depend on the specific nature of the breach and the applicable laws.
In summary, the Customs Act 1901 provides a framework for the creation of Tariff Concession Orders through sections 269C, 269B, 269D, 269E, 269F, 269P, 269S, and 269SJ, which require applicants to meet specific criteria and mandate the CEO to assess and act on these applications. The Act also imposes obligations on the CEO to publish notices and consider submissions. While the Act does not detail specific penalties for breaches, non-compliance could lead to significant legal and administrative consequences.