EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127276
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.
Fosters Group applied for a TCO in respect of certain beer keg sterilising machines on 12 August 2011.
Instrument
TCO No 1127276 was made on 14 November 2011. It declares that those certain beer keg sterilising 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. 1127276 is taken to have come into force on 12 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, establishes a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specific goods. This Act addresses the problem of ensuring that Australian industries are not unduly burdened by customs duties on goods for which no equivalent is produced domestically, thus fostering fair competition and encouraging the production of goods within Australia. The policy objective of this Act, as outlined in the Explanatory Statement for Tariff Concession Instrument No. 1127276, is to facilitate the import of goods for which there is no Australian-produced substitute, thereby benefiting the economy by promoting efficient use of resources and supporting local industries. This particular instrument, effective from 12 August 2011, grants a tariff concession on certain beer keg sterilising machines, reducing their duty from 5% to free, in response to an application by Fosters Group.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative instrument applies to any person or entity that seeks to apply for a TCO in relation to goods not specified in section 269SJ of the Act, which outlines goods ineligible for tariff concessions. The Act's scope is national, as it falls under the Commonwealth jurisdiction, thereby impacting all states and territories within Australia. To qualify for a TCO, the applicant must demonstrate that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once the CEO determines that an application meets the core criteria, they must issue a written order specifying the tariff concession, as seen in the case of Tariff Concession Order No. 1127276 for certain beer keg sterilising machines, which resulted in a reduction from the general duty rate of 5% to a duty-free rate. The Act allows for further regulation and detail to be provided through subordinate instruments, though this particular instance did not extend beyond the primary legislation.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for certain goods. Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) requires the CEO to make a written TCO if satisfied that the application meets the core criteria. Section 269SJ lists goods that cannot be subject to a TCO. The instrument in question, TCO No. 1127276, was made under these sections, applying a zero duty rate to certain beer keg sterilising machines.
The Act imposes several obligations on the parties involved. The CEO must decide whether a TCO application meets the core criteria as outlined in section 269C. If the application is deemed valid, the CEO is required to make a written TCO under section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any objections to the TCO. Fosters Group, as the applicant, must ensure their application meets the core criteria and provide any necessary information to satisfy the CEO. Importers of the affected goods must comply with the new tariff rates and may apply for duty refunds for imports made since the TCO came into effect.
Failure to comply with the requirements of the Customs Act 1901 can result in various consequences. While the explanatory statement does not specify particular offences or penalties, non-compliance with customs regulations generally can lead to civil or criminal penalties. For example, knowingly making false statements or providing misleading information in a TCO application could result in fines or imprisonment. Importers failing to claim refunds or incorrectly claiming duty refunds could also face financial penalties or other administrative actions. The exact penalties would depend on the specific breach and relevant provisions of the Customs Act and associated regulations.