EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1128462
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 Ltd applied for a TCO in respect of certain filling machines on 17 August 2011.
Instrument
TCO No 1128462 was made on 14 November 2011. It declares that those certain filling 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. 1128462 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 Tariff Concession Instrument No. 1128462 was enacted in 2012 under the Customs Act 1901 to address the issue of providing tariff concessions for specific goods. This legislation aims to facilitate the importation of certain goods by reducing the customs duty to zero for those items, provided they meet the criteria set out in the Act. The instrument was introduced to benefit importers by lowering the duty rate on specified goods, thus promoting trade and economic activity. The enacting body responsible for this instrument is the Chief Executive Officer of Customs, who must satisfy certain core criteria before issuing a Tariff Concession Order. This process ensures that the concessions are granted fairly and in line with the policy objectives outlined in the Customs Act.
The explanatory statement highlights that the Customs Act 1901 provides a framework for the creation of Tariff Concession Orders, which can lower the customs duty for certain goods if they are not substitutable by goods produced in Australia. In this case, Fosters Group Ltd applied for a tariff concession on certain filling machines, which was subsequently granted by the CEO of Customs. The instrument came into effect on the date of the application, 17 August 2011, and it does not disadvantage any person or impose liabilities for actions taken prior to its registration. This legislative action aims to support importers by allowing them to apply for a refund of duty on goods imported since the effective date of the Tariff Concession Order.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods and provide a lower rate of customs duty, contingent upon the goods not being substitutable by any produced in Australia. The process begins with an application under section 269F, which must meet core criteria including the absence of substitutable goods produced in Australia as outlined in section 269C. The Act specifically excludes certain goods from TCOs as per section 269SJ. For example, in the case of TCO No. 1128462, Fosters Group Ltd successfully applied for tariff concessions on certain filling machines, resulting in a duty rate of free instead of the general 5%. The TCO's commencement date aligns with the date of the application, as per subsection 269S(1), and the order does not retroactively affect the rights or impose liabilities on non-Commonwealth entities. The CEO must also publish notices in the Gazette inviting public submissions, although in this instance, no submissions were received.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1128462, as part of the Customs Act 1901, revolve around the process and conditions for making a Tariff Concession Order (TCO) (sections 269C, 269P(3), 269K(1), and 269S). Section 269C mandates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, they must issue a written order (a TCO) under section 269P(3). This order specifies that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting them a concessionary duty rate, which in this case is free, whereas the general rate is 5%. Section 269K(1) requires that as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views. This process was followed in this instance, although no submissions were received.
The obligations imposed by the Act on the parties it governs are primarily centred on the application and assessment process for a TCO. The applicant, in this case Fosters Group Ltd, must ensure that their application complies with the criteria set out in the Act, particularly the requirement that no substitutable goods were produced in Australia on the day the application was lodged. The CEO of Customs has the responsibility to assess the application against these criteria and, if satisfied, to issue the TCO. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as per section 269K(1). In this instance, the CEO did not receive any submissions in response to the published notice.
The legislation also outlines specific consequences for breaches or non-compliance. However, the explanatory statement does not detail specific offences or penalties for breaches related to TCOs under this Act. Generally, under Australian law, breaches of customs regulations can lead to civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties can include fines, while criminal penalties might include imprisonment. It is important to note that the Act ensures that the rights of a person (other than the Commonwealth) are not adversely affected by the TCO, and no liabilities are imposed on any person as a result of the TCO.