EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132153
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.
Screenmasters Australia applied for a TCO in respect of certain waste material screening machines on 20 September 2011.
Instrument
TCO No 1132153 was made on 12 December 2011. It declares that those certain waste material screening 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. 1132153 is taken to have come into force on 20 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, establishes the legislative framework for the administration of customs duties and provides for the creation of Tariff Concession Orders (TCOs). This Act was introduced to address the need for flexibility in the application of customs duties, particularly to support industries that may be at a competitive disadvantage due to the lack of local production of certain goods. The Act allows the Chief Executive Officer of Customs to reduce or eliminate customs duty on specified goods if no substitutable goods are produced in Australia, thus encouraging investment and local production. The instrument in question, Tariff Concession Instrument No. 1132153, was introduced to provide tariff concessions for certain waste material screening machines, reflecting the policy objective of fostering competitive and innovative industries by reducing the cost of importing these goods.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply to specific goods, allowing for a lower rate of customs duty, and are subject to certain criteria outlined in the Act. The process begins when an individual or entity applies to the CEO for a TCO concerning particular goods, provided those goods are not listed in section 269SJ as ineligible. The CEO must then determine if the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business at the time of application. If satisfied, the CEO issues a TCO, as occurred with Screenmasters Australia's application for waste material screening machines, which led to TCO No. 1132153 on 12 December 2011. This TCO applies to these machines and exempts them from the general 5% duty rate, setting the duty at free. The Act mandates public consultation upon acceptance of a valid application, though in this case, no objections were received. The TCO's effective date is the application date, 20 September 2011, and it does not retroactively affect rights or impose liabilities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1132153 under the Customs Act 1901 (the Act) focus on the establishment and implementation of Tariff Concession Orders (TCOs). Section 269F permits an individual or entity to apply to the Chief Executive Officer of Customs (the CEO) for a TCO for specific goods. If the CEO determines that the application is valid and meets the core criteria (section 269C), a TCO is made under section 269P(3). This TCO declares that the specified goods will have a lower rate of customs duty, as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed on parties by this Act include ensuring that any application for a TCO is made in accordance with the stipulations of section 269F. The CEO must rigorously assess each application against the core criteria set out in section 269C, which requires that no substitutable goods are being produced in Australia at the time the application is lodged. The definition of key terms such as ‘substitutable goods’ and ‘goods produced in Australia’ is further elaborated in sections 269D, 269E, and 269B of the Act. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO application, as required by section 269K(1).
In terms of consequences for non-compliance, the Act does not explicitly outline specific offences or penalties for failing to adhere to the TCO provisions. However, the legal framework surrounding the Customs Act 1901 implies that any breaches of customs regulations could potentially lead to civil or criminal penalties, depending on the nature and severity of the violation. The CEO, as the authority responsible for administering the TCO, would have the power to enforce compliance and could potentially pursue legal action against entities that do not comply with the terms of the TCO or other related customs laws. The exact penalties would be determined based on the specific circumstances of the breach and the applicable legal provisions.