EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132973
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 pump parts on 27 September 2011.
Instrument
TCO No 1132973 was made on 19 December 2011. It declares that those certain 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. 1132973 is taken to have come into force on 27 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 Tariff Concession Instrument No. 1132973, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on certain imported goods, specifically certain pump parts, to ensure they are competitively priced in the Australian market. This instrument allows for a concession in the customs duty rate for these goods, aiming to provide economic benefits and potentially reduce costs for businesses that rely on these parts. The instrument was enacted by the Chief Executive Officer of Customs, following an application by Hammelmann on 27 September 2011, and it came into effect on the same date. The policy objective, as outlined in the Act, is to provide relief where no substitutable goods are produced in Australia, thereby supporting the competitive position of Australian businesses that import such goods. The instrument does not impose any liabilities on persons other than the Commonwealth and allows for the potential refund of duty for importers of the specified goods.
Scope and Application
The Tariff Concession Order No. 1132973 under the Customs Act 1901 applies to certain pump parts for which Hammelmann applied on 27 September 2011. This order, made by the Chief Executive Officer of Customs (CEO) on 19 December 2011, declares that these specified pump parts are subject to a lower rate of customs duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The concession applies specifically to those goods for which no substitutable goods were produced in Australia at the time the application was lodged. The CEO was satisfied that the application met the core criteria set out in the Customs Act, particularly that no substitutable goods were being produced domestically in the ordinary course of business. The geographic reach of this concession is national, applying across all jurisdictions in Australia. The TCO does not disadvantage any person or impose new liabilities on any person in respect of actions taken before its registration, but it does benefit importers by potentially allowing them to apply for a refund of duty paid on goods imported since the effective date of 27 September 2011.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1132973 (TCO No. 1132973) under the Customs Act 1901 (the Act) are primarily outlined in sections 269C, 269P, and 269S. Section 269C (3) specifies the core criteria that must be met for a Tariff Concession Order (TCO) to be granted, which includes the condition that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that these core criteria are met, a written order (TCO) must be issued. Section 269S(1) provides that the TCO is taken to have come into force on the day the application was lodged.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess TCO applications against the core criteria set out in section 269C. If the CEO determines that the application meets the criteria, they must make a TCO as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. This requirement ensures transparency and allows interested parties to voice their concerns.
Breaches of the Act or its regulations can lead to both civil and criminal consequences. For instance, if a person knowingly provides false information in an application for a TCO, they may be liable to a penalty as per section 271A of the Act. The maximum penalty for such an offence can be up to 10,000 penalty units or imprisonment for five years, or both, depending on the severity of the offence. It is crucial for applicants and other involved parties to adhere to the requirements and obligations under the Act to avoid such penalties.