EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1118676
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.
Clark Equipment applied for a TCO in respect of certain air compressors on 10 June 2011.
Instrument
TCO No 1118676 was made on 05 September 2011. It declares that those certain air compressors 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. 1118676 is taken to have come into force on 10 June 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, as supplemented by the Tariff Concession Instrument No. 1118676 enacted in 2011, provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on certain goods. This legislative instrument addresses the problem of ensuring that Australian consumers and businesses have access to competitively priced goods by allowing for reduced customs duty rates on specific items, provided no substitutable goods are produced in Australia. The instrument was enacted by the Parliament of Australia, with the policy objective of facilitating the import of goods that are not locally produced, thereby supporting economic efficiency and consumer choice.
The Tariff Concession Instrument No. 1118676, which came into effect on the date the application was lodged (10 June 2011), was issued following an application by Clark Equipment for tariff concessions on certain air compressors. After determining that no substitutable goods were produced in Australia, the CEO made the written order, which specifies that these air compressors are subject to a free rate of duty, down from the general rate of 5%. This instrument also mandates that the CEO must publish a notice in the Gazette, inviting submissions from interested parties, although no such submissions were received in this instance. The rights of importers will be positively affected, as they can apply for refunds of duty on goods imported since the TCO came into force, without any imposition of new liabilities.
Scope and Application
The Tariff Concession Instrument No. 1118676, issued under the Customs Act 1901, applies to specific air compressors for which Clark Equipment submitted an application on 10 June 2011. The instrument was enacted to provide tariff concessions, effectively granting these particular goods a zero rate of customs duty, differing from the general rate of 5% applicable to such goods. This instrument is applicable to the entity Clark Equipment and the goods specified in the application, and it operates within the framework of the Customs Act 1901 and the Customs Tariff Act 1995. The geographic scope of this legislation is national, as it pertains to the importation of goods into Australia and the associated customs duties. There are no exclusions or exemptions specified in this particular TCO, and it does not disadvantage any person or impose liabilities on anyone in respect of actions taken before its commencement. The TCO was published in the Gazette as per the Act's requirements, inviting any interested parties to submit objections, none of which were received. The instrument is effective from 10 June 2011, the date the application was lodged, and allows for potential duty refunds for importers of the specified goods from that date.
Key Provisions
The main operative sections of the Customs Act 1901, specifically part XVA, establish the framework for Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, provided that the goods in question are not those specified in section 269SJ, which are ineligible for TCOs. If the application meets the core criteria as outlined in section 269C, the CEO must make a written TCO, as specified in section 269P(3). This process ensures that if no substitutable goods are produced in Australia on the day the application is lodged, as per section 269C, a TCO can be issued, thereby applying a lower rate of customs duty to the goods in question.
Under this Act, the CEO has specific obligations when handling TCO applications. The CEO must ensure that the application is valid and not in respect of goods specified in section 269SJ. If the application meets the core criteria under section 269C, the CEO must make a written TCO declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who may have reasons why the TCO should not be made, as per subsection 269K(1). This ensures transparency and allows for public input before a TCO is issued.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can result in various consequences. While the explanatory statement does not detail specific civil or criminal penalties, it is reasonable to infer that non-compliance could lead to legal actions, fines, or other administrative penalties as prescribed by the Act. For instance, incorrect or misleading information in a TCO application could result in penalties under the Act, and persistent non-compliance might lead to more severe consequences, including potential criminal charges. The exact penalties would depend on the nature and severity of the breach, but they are intended to enforce the integrity of the TCO process.