EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1135002
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.
Powerplants Australia applied for a TCO in respect of certain greenhouse screen control system on 18 October 2011.
Instrument
TCO No 1135002 was made on 12 January 2012. It declares that those certain greenhouse screen control system 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. 1135002 is taken to have come into force on 18 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, establishes a framework for tariff concession orders (TCOs) through which the Chief Executive Officer of Customs can apply reduced customs duties on certain goods. This legislative provision addresses the need for economic relief and trade facilitation by enabling the exemption of specific goods from higher customs duty rates. Instrument No. 1135002, made under the Customs Act, is an example of such a concession, specifically for certain greenhouse screen control systems. The instrument was introduced to alleviate the financial burden on businesses that rely on these systems, ensuring that no substitutable goods are produced in Australia at the time of the application. The policy objective is to support the competitive position of Australian businesses by providing them with cost-effective access to necessary imported goods.
Scope and Application
The Tariff Concession Instrument No. 1135002, pursuant to the Customs Act 1901, applies to the specific category of greenhouse screen control systems as identified in the Instrument. This legislation is designed to provide a concessional rate of customs duty for these goods, thereby reducing the financial burden on businesses importing these items into Australia. The Act applies to any person or entity that imports these goods and the instrument specifically addresses the customs duty applicable to these imports. The geographic reach of this legislation is nationwide, applying across all states and territories within Australia. The Act does not specify any exclusions, but it is contingent upon the condition that no substitutable goods are produced in Australia at the time of the application. The application of this concession is further regulated by the Customs Tariff Act 1995, which defines the tariff rates and conditions under which such concessions are granted. This legislation may also be extended or restricted through subordinate instruments as necessary, although such amendments would need to comply with the overarching provisions of the Customs Act 1901.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1135002, made under the Customs Act 1901, relate to the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs (section 269F). This instrument declares that certain greenhouse screen control systems are subject to a concessional rate of customs duty, effectively reducing the duty from 5% to free (section 269P(3)). The core criteria for such a concession, as outlined in section 269C, require that no substitutable goods are produced in Australia on the day the application is lodged. Definitions for key terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. The application process also mandates that the CEO publish a notice in the Gazette inviting submissions from any interested parties, though no submissions were received in response to this notice (subsection 269K(1)).
The obligations imposed on the parties or entities governed by this Act primarily involve the process of applying for and receiving a TCO. For applicants, this entails ensuring that their application meets the core criteria, including demonstrating that no substitutable goods are being produced in Australia. For the CEO, the obligations include accepting valid applications, evaluating them against the core criteria, and publishing notices in the Gazette to invite submissions from the public. Additionally, once a TCO is issued, the CEO must ensure that the terms of the TCO are adhered to and that any applicable refunds are processed correctly under the Regulations (paragraph 126(1)(r)).
In terms of offences, penalties, or consequences for breach, the Act does not specify explicit penalties for failing to comply with the provisions of a TCO. However, any failure to adhere to the terms of a TCO could potentially lead to disputes regarding duty refunds and compliance with customs regulations. Non-compliance might result in administrative actions or legal challenges, particularly if an entity incorrectly claims benefits under a TCO. The penalties for such breaches would typically be enforced under the broader framework of the Customs Act and associated regulations, which could include fines or other sanctions as deemed appropriate by the relevant authorities.