EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138791
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.
Project Solutions Australia applied for a TCO in respect of certain kneading machine parts on 21 November 2011.
Instrument
TCO No 1138791 was made on 06 February 2012. It declares that those certain kneading machine 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. 1138791 is taken to have come into force on 21 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 Parliament of Australia, provides a framework for the imposition of customs duties and for the granting of tariff concessions to facilitate trade and economic efficiency. One of the mechanisms established by the Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on specified goods. This legislative instrument was designed to address the need for flexibility in trade regulations, enabling the Australian government to respond to specific trade-related needs by reducing barriers for certain imported goods. The explanatory statement for Tariff Concession Instrument No. 1138791, which was made on 6 February 2012, details an application by Project Solutions Australia for a TCO concerning certain kneading machine parts. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession, and accordingly, the instrument was registered, effective from 21 November 2011. This instrument ensures that the importing community is not disadvantaged and provides a clear pathway for duty refunds for qualifying imports.
Scope and Application
The Tariff Concession Instrument No. 1138791 pertains to the Customs Act 1901, specifically targeting goods for which a Tariff Concession Order (TCO) can be issued by the Chief Executive Officer of Customs. This legislation applies to persons or entities seeking to import goods that are not specified in section 269SJ of the Act, which excludes certain goods from eligibility for a TCO. The scope of the Act extends to any individual or organisation seeking tariff concessions for goods that meet the core criteria as outlined in sections 269C and 269D. The geographic reach of this legislation is national, as it applies across Australia under the Commonwealth’s authority. The Act does not impose any liabilities on persons other than the Commonwealth and does not affect the rights of any individual or entity as at the date of the TCO registration, ensuring that no one is disadvantaged by the concession. The application process includes a requirement for the CEO to publish a notice in the Gazette to allow for public submissions, although in this instance, no submissions were received. The TCO, effective from the date of the application, provides a tariff rate of free for the specified goods, as opposed to the general rate of 5%.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act 1901. Specifically, Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning goods. The CEO must then determine whether the application meets the core criteria specified in Section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO is satisfied with the application, they must make a written order (Section 269P(3)) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby granting tariff concessions.
The Act imposes certain obligations on the parties involved. The applicant must ensure that the application for a TCO is made in respect of goods not listed in Section 269SJ, which are ineligible for tariff concessions. The CEO is required to publish a notice in the Gazette (Section 269K(1)) inviting submissions from any person who believes the TCO should not be granted. The CEO must also consider these submissions before making a decision. Additionally, Section 269S(1) mandates that a TCO is deemed to come into force on the day the application is lodged, ensuring timely effect for the tariff concessions.
The legislation outlines potential consequences for non-compliance. While the Explanatory Statement does not explicitly mention specific offences, breaches of the Customs Act 1901 or the Customs Tariff Act 1995 may lead to civil or criminal penalties, including fines and imprisonment, depending on the nature and severity of the breach. For instance, under Section 244 of the Customs Act 1901, the maximum penalty for knowingly importing goods in contravention of the Act is a fine of up to 10,000 penalty units or imprisonment for up to 10 years, or both, for a corporation. For individuals, the maximum penalties are lower but still significant. The specific penalties would be determined by the courts based on the circumstances of the breach.