EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1131849
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 pressure pump parts on 19 September 2011.
Instrument
TCO No 1131849 was made on 13 December 2011. It declares that those certain pressure pump parts 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. 1131849 is taken to have come into force on 19 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, enacted by the Australian Parliament, provides for the regulation of goods entering and leaving Australia, including the imposition of customs duty. The Act facilitates tariff concession orders (TCOs) under Part XVA, which allow for reduced or waived customs duty on certain goods, thereby addressing issues related to the competitiveness of Australian businesses in the global market. Specifically, Tariff Concession Instrument No. 1131849, issued under this Act, was introduced to address the need for tariff concessions on certain pressure pump parts, ensuring that Australian businesses and consumers benefit from reduced costs without disadvantaging existing rights or imposing new liabilities. The instrument was made on 13 December 2011, following an application by Hammelmann, and came into effect on 19 September 2011. The policy objective of this instrument is to foster economic efficiency and support Australian industries by ensuring that no substitutable goods were produced domestically at the time of the application.
Scope and Application
The Tariff Concession Instrument No. 1131849 applies to certain pressure pump parts, as specified in the instrument, and is enacted under the Customs Act 1901. The instrument grants tariff concessions by reducing the rate of customs duty to free on these goods, provided they meet the specified criteria under the Act. This instrument is specifically targeted at entities involved in the importation of these goods, aiming to reduce the financial burden on importers by eliminating customs duty. The application of this concession is national in scope, applying across all jurisdictions in Australia. Notably, the instrument does not disadvantage any person or impose liabilities on individuals or entities other than the Commonwealth for actions taken prior to the date of the instrument's registration. While the instrument itself is clear in its application, the Act allows for further clarification and extension of its provisions through subordinate instruments, providing flexibility in its implementation.
Key Provisions
The Tariff Concession Instrument No. 1131849 under the Customs Act 1901 outlines the process and criteria for establishing tariff concession orders (TCOs) for specific goods. The main operative sections of the legislation, particularly sections 269C, 269F, and 269P(3), establish the conditions under which a TCO can be granted by the Chief Executive Officer of Customs (CEO). Specifically, section 269F allows a person to apply to the CEO for a TCO concerning particular goods, provided that the goods are not specified in section 269SJ as ineligible for such concessions. The CEO must then determine whether the application meets the core criteria outlined in section 269C, which require that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged.
The obligations and requirements imposed by the Act on parties and entities primarily revolve around the application and evaluation process for TCOs. The CEO must promptly evaluate the application to ensure it complies with the core criteria, including verifying that no substitutable goods are being produced domestically. If the application meets these criteria, the CEO is mandated to issue a written order (section 269P(3)) that effectively reduces the duty on the specified goods. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be granted, although in this instance, no such submissions were received.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the TCO requirements. However, any failure to adhere to the terms of the TCO or any related misrepresentation of facts during the application process could potentially lead to legal scrutiny or administrative penalties. While the legislation itself does not specify maximum penalties, breaches of related customs regulations could result in financial penalties, fines, or other enforcement actions under broader customs legislation. It is essential for applicants and entities to ensure full compliance with the application and concession processes to avoid any potential legal repercussions.