EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1126225
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.
Visy Industries Pty Ltd applied for a TCO in respect of certain carton filling and sealing machines on 04 August 2011.
Instrument
TCO No 1126225 was made on 02 November 2011. It declares that those certain carton filling and sealing 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. 1126225 is taken to have come into force on 04 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the regulation of customs duties and tariffs, including the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which can reduce customs duty rates on certain goods. The Tariff Concession Instrument No. 1126225, introduced to address the need for tariff concessions on specific goods, aims to facilitate trade by reducing the customs duty on certain carton filling and sealing machines. The instrument was made to assist businesses by lowering the duty rate from 5% to free, provided no substitutable goods were being produced in Australia at the time of the application. The CEO of Customs is mandated to consider applications against specified criteria, ensuring that the concessions do not undermine domestic production. Public consultation was conducted through a notice in the Gazette, but no objections were received, leading to the issuance of the TCO, which took effect from the date of the application.
Scope and Application
The Tariff Concession Instrument No. 1126225, made under the Customs Act 1901, applies to the specific carton filling and sealing machines for which Visy Industries Pty Ltd applied. This instrument grants a tariff concession, effectively reducing the duty on these machines from the general rate of 5% to zero. The application of this concession is subject to the core criteria outlined in section 269C of the Act, which mandates that no substitutable goods are produced in Australia in the ordinary course of business. This instrument is an administrative measure that facilitates reduced customs duties on specified goods, thus benefiting importers of such goods by potentially allowing them to apply for a refund of duties paid prior to the concession's effective date. The scope of this legislation is geographically limited to Australia and pertains specifically to customs duties on the named goods. There are no stated exclusions or exemptions within this particular instrument, although broader exclusions are defined in section 269SJ of the Act. The application of the Act may be extended or restricted through subordinate instruments, which are not detailed in this specific concession.
Key Provisions
The main operative sections of this legislation concern Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods (Section 269F). If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ, they must determine if the application meets the core criteria (Section 269C). If the CEO finds that the application meets these criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (Section 269P(3)).
The Act imposes certain obligations and requirements on the parties involved. The CEO of Customs is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (Section 269K(1)). For the purposes of this legislation, a TCO is considered to come into force on the day the application for the TCO was lodged (Section 269S(1)). 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 in respect of anything done or omitted to be done before the date of registration.
In terms of potential breaches and consequences, the Customs Act 1901 does not specify offences, penalties, or civil/criminal consequences for non-compliance with the TCO process. However, it does note that the rights of importers will be beneficially affected and that they can apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). The TCO itself does not impose any liabilities on any person. The absence of specific penalties suggests that the primary focus of the Act is on facilitating the concession of tariff duties under certain conditions, rather than on punitive measures for non-compliance.