EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127867
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.
Kennon Auto applied for a TCO in respect of certain cutting system on 17 August 2011.
Instrument
TCO No 1127867 was made on 07 November 2011. It declares that those certain cutting system 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. 1127867 is taken to have come into force on 17 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 for the regulation of customs and excise duties, and includes provisions for the granting of tariff concession orders (TCOs) by the Chief Executive Officer of Customs. These concessions aim to lower the rate of customs duty on certain goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 1127867, issued under this Act, addresses the need for tariff relief by declaring certain cutting systems as eligible for a TCO, thereby setting their duty rate to free, effective from the date of application. This instrument was introduced to support businesses by reducing import costs and was implemented without imposing any liabilities or disadvantaging existing rights holders.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals and entities seeking to import goods that are not produced domestically, allowing for a lower rate of customs duty on such goods if certain criteria are met. The CEO assesses applications to determine if the goods in question are not substitutable with Australian-produced goods and are not specified in section 269SJ of the Act as ineligible for a TCO. Once the application meets the core criteria, a TCO is issued, effectively applying a prescribed lower rate of duty on the specified goods. The TCO applies nationally, influencing import duties across the Commonwealth. Notably, the Act does not disadvantage existing rights of parties other than the Commonwealth and imposes no liabilities on such parties for actions taken prior to the TCO's registration. The CEO is also required to consult by publishing notices in the Gazette to invite submissions on the TCO application, although in this case, no objections were received. The Tariff Concession Instrument No. 1127867, resulting from an application by Kennon Auto for a certain cutting system, exemplifies this process and came into force on the date of application lodging, 17 August 2011.
Key Provisions
The Tariff Concession Instrument No. 1127867, under the Customs Act 1901, provides specific provisions for tariff concessions on certain goods. Section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for particular goods. If the CEO determines that the application meets the core criteria, as outlined in section 269C, a TCO can be issued. This means that a lower rate of customs duty, or in some cases, a free rate, will apply to the specified goods.
The obligations imposed by this Act on the parties include the requirement for the CEO to assess applications against the criteria specified in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties regarding the application, as stipulated in subsection 269K(1). Additionally, any person considering that there are reasons why the TCO should not be made has the opportunity to lodge a submission with the CEO. The CEO did not receive any submissions for this particular TCO, which suggests that the application was unopposed and met all necessary criteria.
Failure to comply with the requirements or obligations under the Customs Act 1901 can lead to various consequences. For example, if a person knowingly makes a false statement in an application for a TCO, they may be subject to criminal penalties. Under section 269SJ of the Act, penalties can include fines and imprisonment. The maximum penalties for such offences are detailed in the relevant sections of the Customs Act and associated regulations, but they generally include substantial fines and imprisonment terms that reflect the severity of the breach.
In summary, the Tariff Concession Instrument No. 1127867 provides a mechanism for lowering or eliminating customs duties on specified goods through the issuance of TCOs. The CEO must follow a defined process to assess and approve such orders, while applicants must ensure their submissions meet the statutory criteria. Non-compliance or fraudulent applications can result in significant civil or criminal penalties, reinforcing the importance of adherence to the legislative framework.