EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1133802
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.
BFT Automation Australia Pty Ltd applied for a TCO in respect of certain linear acting cylinder motors on 05 October 2011.
Instrument
TCO No 1133802 was made on 04 January 2012. It declares that those certain linear acting cylinder motors 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. 1133802 is taken to have come into force on 05 October 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 a framework for the administration of customs and excise duties in Australia. One of the mechanisms under this Act is the Tariff Concession Orders (TCO) scheme, introduced to address the need for tariff reductions on specific imported goods to foster economic efficiency and competitiveness. TCOs can be applied for by individuals or businesses and, if approved, result in a lower customs duty rate for the specified goods. This process is overseen by the Chief Executive Officer of Customs, who assesses applications to ensure they meet the stipulated criteria, such as the absence of substitutable goods produced in Australia. The objective of the legislation, as outlined in the explanatory statement, is to facilitate the importation of goods by providing tariff concessions where appropriate, thereby supporting industry needs and enhancing trade practices.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty to be applied to specified goods. The Act applies to individuals or entities that seek tariff concessions for particular goods, provided the goods do not fall under the categories specified in section 269SJ, which cannot be subject to a TCO. The instrument applies nationally across Australia, as it is an Act of the Commonwealth. The scope of the legislation is limited to the application of customs duties on goods, and it does not extend to other forms of taxation or trade regulation. The Act allows for the issuance of TCOs through subordinate instruments, which provide detailed specifications on the types of goods eligible for duty concessions. The application process involves submitting an application to the CEO, who must determine if the goods meet the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The explanatory statement highlights the case of BFT Automation Australia Pty Ltd, which applied for a TCO on linear acting cylinder motors, resulting in a duty rate of free, down from the general rate of 5%.
Key Provisions
Section 269F of the Customs Act 1901 (the Act) allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO determines that the application pertains to goods that are not prohibited under section 269SJ of the Act, they must assess whether the application meets the core criteria. Section 269C states that the application satisfies these criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied the application meets the criteria, they must issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations imposed by the Act on the CEO include accepting valid TCO applications and determining whether they meet the core criteria. If the criteria are met, the CEO must issue a TCO, as specified in section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO if they believe it should not be granted. This ensures transparency and allows for public input before the order is finalised. Once a TCO is issued, it comes into effect on the date the application was lodged, as stipulated by section 269S(1).
Failure to comply with the provisions of the Customs Act 1901 can result in various penalties and consequences. The specific offences and their associated penalties are detailed in the Customs Act itself and may include fines or imprisonment for wilful breaches, depending on the severity of the offence. For instance, section 244 of the Act imposes a penalty of up to 10,000 penalty units or imprisonment for five years, or both, for serious customs offences. Additionally, civil penalties may apply under the Act for breaches of the TCO provisions, which could include fines or other financial penalties as determined by the relevant authorities. The Act ensures that those who do not adhere to its requirements face appropriate repercussions.