EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1126039
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.
Boyne Smelters Ltd applied for a TCO in respect of certain cleaning machines on 03 August 2011.
Instrument
TCO No 1126039 was made on 28 October 2011. It declares that those certain cleaning 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. 1126039 is taken to have come into force on 03 August 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. 1126039, made under the Customs Act 1901, was enacted to address the specific needs of Boyne Smelters Ltd, which sought tariff concessions for certain cleaning machines. This instrument, made by the Chief Executive Officer of Customs, came into effect on 03 August 2011, the day the application was lodged, and aims to provide a lower rate of customs duty for these particular goods by declaring them tariff-free. The process involved ensuring that no substitutable goods were produced in Australia, aligning with the core criteria outlined in the Act. This legislative measure was designed to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, while not imposing any liabilities on any person other than the Commonwealth.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking to import goods into Australia and encompasses a range of industries and transactions involving customs duties and tariffs. Specifically, this Act facilitates the implementation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can grant lower rates of customs duty on certain goods. A TCO is applicable to goods for which an application is made and approved by the CEO, provided that such goods do not fall under the exclusions specified in section 269SJ of the Act. The application process involves meeting core criteria such as the absence of substitutable goods produced in Australia, as outlined in sections 269C, 269D, and 269E of the Act. Once a TCO is registered, it becomes effective from the date the application was lodged, thereby altering the customs duty rate for the specified goods. The Act also mandates consultation by publishing notices in the Gazette to allow interested parties to lodge submissions, although in this case, no submissions were received. The application of the TCO does not retroactively affect the rights of any person, including imposing liabilities for actions taken prior to the TCO's effective date.
Key Provisions
The Customs Act 1901, through Tariff Concession Orders (TCOs), allows the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on specified goods (s 269F). An application for a TCO can be submitted by any person under section 269F, provided that the goods in question are not those listed in section 269SJ, which are ineligible for TCOs. To meet the core criteria for a TCO, it must be established that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (s 269C). Substitutable goods are defined in section 269D as those produced in Australia that can be put to a similar use as the goods in question. The CEO must make a written order declaring the goods eligible for the tariff concession if satisfied that the application meets the core criteria (s 269P(3)).
Under the Act, the CEO is obligated to publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the making of a TCO (s 269K(1)). If no submissions are received, the CEO proceeds to assess the application. For the TCO to take effect, it must be registered, and it will be deemed to have come into force on the date the application was lodged (s 269S(1)). The TCO ensures that it does not disadvantage any person other than the Commonwealth or impose liabilities on them in respect of actions taken before the registration date (s 269S(1)). It also allows for the refund of duties on goods imported since the effective date of the TCO (Reg 126(1)(r)).
Failure to comply with the requirements of the Customs Act 1901, particularly in relation to the submission of false information in TCO applications or misuse of the concessions, can lead to legal consequences. Offences under the Act may result in civil or criminal penalties. For example, knowingly making a false statement in an application for a TCO could result in penalties under section 269T of the Act, which includes fines up to $22,000 or imprisonment for up to two years, or both. Additionally, any misuse of tariff concessions could result in financial penalties, including the repayment of any undue benefits received, under section 269U of the Act. The specifics of penalties are further detailed in the Customs Act and the associated regulations.