EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1133340
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.
BOC Ltd applied for a TCO in respect of certain pumps on 30 September 2011.
Instrument
TCO No 1133340 was made on 04 January 2012. It declares that those certain pumps 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. 1133340 is taken to have come into force on 30 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 a framework for the administration of customs duties and the regulation of the importation and exportation of goods. The Act, particularly Part XVA, allows for the creation of Tariff Concession Orders (TCOs) to provide relief on customs duties for specific goods. This legislative instrument was introduced to address the need for reducing import costs for certain goods that are not produced domestically or do not have suitable substitutes manufactured in Australia. By providing a lower or free rate of customs duty, the Act aims to promote competitive pricing and accessibility of goods in the Australian market. Instrument No. 1133340, made under this Act, grants a tariff concession for certain pumps, reducing the customs duty rate from 5% to free, effective from the date the application was lodged, 30 September 2011. This legislative action was taken after the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, aligning with the core criteria stipulated in the Act.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) that provide a lower rate of customs duty for specified goods. This legislation applies to any person who can apply for a TCO, provided that the goods in question are not those listed in section 269SJ of the Act, which excludes certain goods from tariff concessions. The core criteria for granting a TCO, as per section 269C, is that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. This instrument affects the importation of goods, providing tariff concessions to certain products, and extends across the Commonwealth of Australia. The application of the TCO is retrospective to the date of the application, but it does not affect any pre-existing rights or liabilities. In the case of TCO No. 1133340, the application for tariff concessions for certain pumps by BOC Ltd was accepted and declared effective from 30 September 2011, the date the application was lodged, with no substitutable goods being produced in Australia, thereby qualifying the pumps for a duty-free rate.
Key Provisions
The Tariff Concession Instrument No. 1133340, made under section 269F of the Customs Act 1901, outlines the conditions under which a Tariff Concession Order (TCO) is granted to reduce or eliminate customs duty on certain goods. Specifically, section 269C requires the Chief Executive Officer (CEO) of Customs to ensure that no substitutable goods are produced in Australia before granting a TCO. Section 269P(3) mandates the CEO to issue a written order if the application meets these core criteria. In this case, TCO No. 1133340 was issued for certain pumps on 4 January 2012, making them duty-free by applying item 50 of Schedule 4 to the Customs Tariff Act 1995, which previously had a general rate of duty of 5%.
The obligations imposed by this legislation on the parties involved include the requirement for applicants to ensure their goods meet the criteria for a TCO. The CEO, on the other hand, must verify that no substitutable goods are produced in Australia and must publish a notice in the Gazette inviting submissions on the application. In this instance, BOC Ltd applied for the TCO on 30 September 2011, and the CEO issued the order after satisfying the core criteria, as no submissions were received opposing the TCO. The TCO took effect from 30 September 2011, but it does not disadvantage any person or impose new liabilities on anyone.
Failure to comply with the provisions of the Customs Act 1901, or any associated regulations, can result in legal consequences. While the specific penalties for breaches of the TCO are not detailed in the explanatory statement, breaches of the Customs Act generally may lead to both civil and criminal penalties. Civil penalties can include fines, and in severe cases, criminal penalties may involve imprisonment. The exact penalties would depend on the nature and severity of the breach, as outlined in the relevant sections of the Customs Act and the Customs Regulations 1993.