EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138536
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.
Acora Reneco Group applied for a TCO in respect of certain wood sawing machines on 18 November 2011.
Instrument
TCO No 1138536 was made on 13 February 2012. It declares that those certain wood sawing 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. 1138536 is taken to have come into force on 18 November 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, outlines a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty on specified goods, thereby addressing the problem of high import tariffs on certain items that are not produced domestically or have no suitable domestic substitutes. The act allows for the application process for such tariff concessions, ensuring that the application meets core criteria, such as the absence of substitutable goods produced in Australia. This legislative instrument aims to facilitate trade by reducing the cost of importing certain goods, thus supporting economic activity and competitiveness. In line with these objectives, Tariff Concession Instrument No. 1138536 was introduced to provide tariff relief on specific wood sawing machines, benefiting importers by reducing their duty costs and ensuring no adverse impact on existing rights or liabilities.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals or entities seeking tariff concessions for specific goods imported into Australia. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, thereby meeting the core criteria specified under section 269C of the Act. If the CEO determines that an application meets these criteria, a TCO is issued, reducing the customs duty on the specified goods, as outlined in Schedule 4 of the Customs Tariff Act 1995. This instrument extends its application across the Commonwealth of Australia, affecting the rights of importers and potentially allowing for duty refunds under specific regulations. The Act does not disadvantage any person, including the Commonwealth, by affecting rights or imposing liabilities for actions taken prior to the TCO's registration date.
Key Provisions
The Customs Act 1901, through Part XVA, outlines the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows any person to apply to the CEO for a TCO in respect of specific goods. The CEO is required to determine whether the application complies with the core criteria, which are detailed in sections 269C, 269B, 269D, 269E, and 269P(3). For instance, section 269C mandates that a TCO application meets the core criteria if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. This means that for a TCO to be granted, the goods in question must not have an Australian-made equivalent that serves the same purpose. If the CEO is satisfied that these criteria are met, they must issue a written TCO, as per section 269P(3).
The obligations under the Customs Act 1901 for parties involved in a TCO application are primarily centred around ensuring compliance with the outlined criteria. The CEO is tasked with verifying that the goods specified in the application do not have substitutable Australian-made counterparts. Furthermore, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who may have objections to the TCO being granted. This is a mandatory step, as per subsection 269K(1), and it ensures transparency and accountability in the process. The applicant, in this case Acora Reneco Group, must provide all necessary information and evidence to substantiate their claim that no substitutable goods are produced in Australia.
Breaches of the requirements outlined in the Customs Act 1901 can lead to various civil and criminal consequences. While the Act does not explicitly detail specific penalties for non-compliance, general provisions under Australian law may apply. For instance, misleading or providing false information to the CEO could result in fines or other civil penalties. Additionally, failure to adhere to the stipulated criteria for a TCO could result in the nullification of the order and potential legal action against the applicant. It is important for all parties involved to thoroughly understand and comply with the legislative requirements to avoid any adverse consequences.