EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1131384
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.
Hammelmann applied for a TCO in respect of certain rotor jet heads on 14 September 2011.
Instrument
TCO No 1131384 was made on 13 December 2011. It declares that those certain rotor jet heads 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. 1131384 is taken to have come into force on 14 September 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 was enacted to provide a comprehensive framework for the regulation of imports and exports within Australia, including the imposition of customs duties on imported goods. One of the mechanisms introduced under Part XVA of the Act is the Tariff Concession Order (TCO), which allows for the concession of customs duty on certain imported goods under specified conditions. The Tariff Concession Instrument No. 1131384, made by the Chief Executive Officer of Customs in 2011, is an example of such an order. This particular TCO was introduced to address the issue of applying lower customs duty rates on certain rotor jet heads, provided no substitutable goods were produced in Australia. The instrument was made effective from the date of the application, 14 September 2011, and no submissions opposing the concession were received during the consultation period. The policy objective underpinning this concession is to potentially stimulate import activities by reducing the duty burden on specific goods, thereby encouraging trade and potentially benefiting importers who can apply for duty refunds on eligible goods imported since the TCO's effective date.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). These orders apply to specific goods for which a lower rate of customs duty is set, provided that the application for the concession meets the criteria outlined in the Act. Specifically, a TCO can be applied for by any person, but it is contingent on the CEO determining that no substitutable goods are produced in Australia in the ordinary course of business. The CEO must ensure that the goods in question are not 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 specifying the applicable tariff concession. This process was followed in the case of TCO No. 1131384 concerning certain rotor jet heads, which was granted on 13 December 2011, effective from the date of the application, 14 September 2011. The TCO does not affect any existing rights or liabilities of parties except to the benefit of importers who may apply for a refund of duties paid on these goods since the effective date of the TCO.
Key Provisions
The primary operative sections of this legislation include sections 269C, 269F, and 269P of the Customs Act 1901, which together govern the process for making Tariff Concession Orders (TCOs). Section 269F outlines the procedure for applying for a TCO, stipulating that an individual may apply to the Chief Executive Officer of Customs (CEO) for such an order concerning specific goods. Section 269C specifies the core criteria that a TCO application must meet, primarily that no substitutable goods were produced in Australia on the date the application was lodged, as defined by sections 269D and 269E of the Act. If the CEO is satisfied that the application meets these criteria, section 269P(3) mandates that a written order be made, declaring the goods to which a particular item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. The CEO must ensure that the application is valid and not in respect of goods specified in section 269SJ of the Act, which are ineligible for a TCO. Once an application is accepted, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons to oppose the TCO (subsection 269K(1)). This consultation process is crucial for ensuring transparency and fairness. Furthermore, if the CEO determines that the application meets the core criteria, they must issue a written TCO, specifying the lower rate of customs duty applicable to the goods in question (subsection 269P(3)).
Breaches of the provisions outlined in the Customs Act 1901 may lead to various civil and criminal consequences. While the explanatory statement does not explicitly list offences or penalties, it is reasonable to infer that any fraudulent application or misuse of a TCO could potentially result in legal action. The general legal framework in Australia provides for penalties such as fines or imprisonment for offences related to customs and tariff regulations, although specific penalties would depend on the nature and severity of the breach. In this particular case, since no submissions were received opposing the TCO, and the CEO was satisfied with the application, there were no breaches reported or penalties imposed.