EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132150
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.
Wilson Transformer Co Pty Ltd applied for a TCO in respect of certain isostatic presses on 19 September 2011.
Instrument
TCO No 1132150 was made on 12 December 2011. It declares that those certain isostatic presses 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. 1132150 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 was enacted by the Australian Parliament to provide for the collection of customs duties and the regulation of the import and export of goods. The Act was amended to include Part XVA, which establishes a scheme for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs. These orders can apply lower rates of customs duty to specified goods, provided certain criteria are met. The problem this legislation aimed to address was the need for a mechanism to provide tariff relief on goods that are not produced in Australia and for which no suitable substitute is available domestically. The explanatory statement for Tariff Concession Instrument No. 1132150, issued under this Act, outlines the process for making such concessions and specifies the application of a 5% duty rate to certain isostatic presses, which has been reduced to free under the TCO. The policy objective here is to facilitate the importation of goods that are not locally produced and cannot be replaced by Australian-made alternatives, thereby supporting industries that rely on imported equipment and components.
Scope and Application
The Tariff Concession Instrument No. 1132150, under the Customs Act 1901, applies to the specific case of certain isostatic presses imported by Wilson Transformer Co Pty Ltd. The act pertains to the application of tariff concession orders (TCOs) which provide for lower rates of customs duty on specified goods. This instrument was enacted to ensure that the isostatic presses in question, which were imported on 19 September 2011, benefit from a concessional duty rate as no substitutable goods were being produced in Australia on that date, thereby meeting the core criteria set out in the Act. The geographic reach of this legislation is national, as it operates under the Commonwealth's authority, impacting customs duty rates on goods imported into Australia. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on individuals or entities for actions taken before its registration. Moreover, the instrument is not subject to exclusions as it specifically targets the isostatic presses in question, and no submissions were received in opposition to its registration. The application and effect of the TCO are further governed by the Customs Tariff Act 1995 and the Customs Regulations 1996.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1132150, made under the Customs Act 1901, include sections 269C, 269B, 269D, 269E, 269P(3), and 269SJ. Section 269C sets the condition that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. Section 269P(3) mandates that if the CEO is satisfied with the application, they must make a written order declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269SJ lists the goods that cannot be subject to a TCO. Section 269S outlines that a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The obligations imposed by the Act on the parties it governs primarily involve the application and review process for a TCO. The Chief Executive Officer of Customs (CEO) must ensure that any TCO application meets the core criteria outlined in section 269C, and that the goods in question are not specified in section 269SJ as ineligible. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made, as required by subsection 269K(1). Additionally, importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the TCO is taken to have come into force, as stipulated in paragraph 126(1)(r) of the Regulations.
The Act includes provisions for potential offences and penalties for breaches, although the explanatory statement does not specify any particular offences related to the making or operation of a TCO. Generally, breaches of the Customs Act 1901 may lead to civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties could include fines, while criminal penalties might involve imprisonment. However, the specific maximum penalties for any breaches are not detailed in the explanatory statement provided. It is important to refer to the relevant sections of the Customs Act 1901 and any associated regulations for precise details on penalties.