EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1129197
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.
BGC Cement Pty Ltd applied for a TCO in respect of certain palletizing machines on 26 August 2011.
Instrument
TCO No 1129197 was made on 22 November 2011. It declares that those certain palletizing 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. 1129197 is taken to have come into force on 26 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, provides a framework for the regulation of customs duties and the importation of goods into Australia. The Act includes provisions for Tariff Concession Orders (TCOs) that allow for reduced customs duty rates on specified goods, provided certain criteria are met. This legislative instrument, Tariff Concession Instrument No. 1129197, was introduced to address the need for tariff concessions in specific cases where the goods in question are not produced domestically and thus do not have substitutable alternatives. In response to an application from BGC Cement Pty Ltd, the Chief Executive Officer of Customs determined that the palletizing machines specified in the application qualified for a tariff concession, resulting in a tariff rate reduction from 5% to free. This decision was made following a review of the application against the core criteria outlined in the Customs Act 1901 and was published in the Gazette, inviting public submissions which none were received. The tariff concession became effective on the date the application was lodged, 26 August 2011, without imposing any retroactive liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1129197 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO). Specifically, it applies to palletizing machines that BGC Cement Pty Ltd sought to import and for which they applied for a TCO on 26 August 2011. The Act applies to any person or entity seeking a TCO for goods that are not specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. The Act also applies to the Chief Executive Officer of Customs who has the authority to make a TCO if the application meets the core criteria set out in section 269C. The geographic reach of this Act is national, as it is a Commonwealth Act, and applies across Australia. The Act does not impose any new liabilities on persons other than the Commonwealth and does not disadvantage any person by affecting their rights as at the date of registration of the TCO. The Act's application may be extended or restricted through subordinate instruments, although no such extensions or restrictions are noted in this specific TCO.
Key Provisions
The key operative sections of this legislation include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. Section 269C specifies the core criteria that a TCO application must meet, particularly that 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 the application meets the core criteria, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this instance, TCO No. 1129197 was made on 22 November 2011, declaring that certain palletizing machines are subject to item 50 of Schedule 4, with the rate of duty on these goods set at free, down from the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that any application for a TCO is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods subject to the prescribed tariff concession. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, the CEO did not receive any submissions, indicating a lack of opposition to the concession.
The Customs Act 1901 outlines potential consequences for breaches of the legislation, though specific offences, penalties, and consequences are not detailed in the explanatory statement provided. Generally, breaches of the Customs Act can lead to civil or criminal penalties, depending on the nature and severity of the offence. Civil penalties may include fines, while criminal penalties can include imprisonment, reflecting the importance of compliance with customs regulations. For TCOs, failure to adhere to the specified conditions could result in the revocation of the concession and the imposition of applicable duties on the goods in question.
Overall, the Act provides a structured framework for the application and granting of tariff concessions, ensuring that the process is transparent and open to public input. The obligations and requirements are designed to maintain the integrity of the customs system, while the potential consequences for non-compliance serve as a deterrent against improper actions.