EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127538
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.
Promains applied for a TCO in respect of certain Haul Off machines on 15 August 2011.
Instrument
TCO No 1127538 was made on 07 November 2011. It declares that those certain Haul Off 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. 1127538 is taken to have come into force on 15 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 Parliament of Australia, establishes a framework for the administration of customs and excise duties, including the imposition of tariff concessions on certain goods. Specifically, Part XVA of the Act provides for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on goods that meet specific criteria. Instrument No. 1127538, issued on 7 November 2011, is one such TCO. This instrument was made in response to an application from Promains regarding certain Haul Off machines, declaring that these machines are subject to a 5% duty rate instead of the general rate, which is free of duty. The objective of this TCO, as per the Act, is to ensure that no substitutable goods were produced in Australia at the time of application, thereby justifying the tariff concession. The instrument came into effect on the date the application was lodged, 15 August 2011, and does not disadvantage any party or impose new liabilities on any person.
Scope and Application
The Tariff Concession Order No. 1127538 under the Customs Act 1901 applies to certain Haul Off machines, granting them a concession on customs duty under the Customs Tariff Act 1995. The concession is effective from the date the application for the order was lodged, which is 15 August 2011, and the order was registered on 7 November 2011. This legislation specifically pertains to goods that are not substitutable with any produced in Australia on the date the application was lodged, thus satisfying the core criteria under the Act. The order benefits importers of these goods by allowing them to apply for a refund of duty on imports made since the order's effective date, as per the Customs Regulations. Notably, the order does not disadvantage any person by affecting their rights prior to the registration date or imposing liabilities on any person other than the Commonwealth.
This Act applies nationally within the Commonwealth of Australia, with the scope extending to any person or entity importing the specified Haul Off machines. The application of this concession is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods were produced in Australia on the application date. There are no exclusions or exemptions specified within the text, and any further application or restriction would be defined through subordinate instruments.
Key Provisions
The Customs Act 1901, under section 269F, allows for the application of Tariff Concession Orders (TCOs) to goods by any person. If the CEO of Customs is satisfied that the application is for goods not specified in section 269SJ, they must decide if the application meets the core criteria outlined in section 269C. To meet these criteria, the application must be for goods for which no substitutable goods are produced in Australia, as defined in sections 269D and 269E. If the CEO is satisfied, they must issue a TCO as per section 269P(3). In this instance, TCO No. 1127538 was issued on 7 November 2011, declaring that certain Haul Off machines are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must 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. In this case, no submissions were received. Furthermore, the Act ensures that the rights of any person (other than the Commonwealth) will not be adversely affected by the TCO, and that no liabilities will be imposed on such persons for actions taken before the TCO was issued.
For any breaches of the provisions outlined in the Act or the associated Regulations, the potential consequences can be significant. The Act does not specify penalties for non-compliance with its provisions directly. However, breaches of associated regulations could lead to various civil or criminal penalties, depending on the nature and severity of the breach. For instance, under section 126 of the Regulations, importers can apply for a refund of duty on goods imported since the TCO was taken to have come into force. Any failure to comply with these provisions could potentially lead to administrative or legal actions, although the specific penalties are not detailed within the Act itself. It is important to note that while the Act does not impose liabilities on any person for actions taken before the TCO was issued, any subsequent non-compliance could lead to penalties under the applicable regulations or other relevant legislation.