EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1140118
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.
Buzz products applied for a TCO in respect of certain dispensing machines on 01 December 2011.
Instrument
TCO No 1140118 was made on 13 February 2012. It declares that those certain dispensing 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. 1140118 is taken to have come into force on 01 December 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 was amended to introduce the mechanism for Tariff Concession Orders (TCOs) through Part XVA, addressing the need for concessional tariff rates for certain imported goods that do not have Australian-made alternatives. Enacted by the Australian Parliament, the Act aims to facilitate trade by providing a process for businesses to apply for lower customs duties on specific goods, thereby encouraging competition and potentially lowering consumer prices. The Tariff Concession Instrument No. 1140118, made under this Act, exemplifies the process by which the Chief Executive Officer of Customs can grant such concessions, as demonstrated by the case of Buzz Products, which successfully applied for a TCO on certain dispensing machines, resulting in a reduction of the duty rate from 5% to free. This legislative measure ensures that the rights of importers are safeguarded and can benefit from duty refunds, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 1140118 under the Customs Act 1901 applies to individuals and entities, specifically importers, who wish to avail themselves of lower customs duty rates for certain goods. This instrument was made by the Chief Executive Officer of Customs, who must consider applications for Tariff Concession Orders (TCOs) under section 269F of the Act. The instrument targets specific goods that are subject to concession, such as the dispensing machines in question, which are now subject to a duty rate of free, as opposed to the general rate of 5%. The application of this concession is effective from the date the application was lodged, in this case, 1 December 2011. The geographic reach of this Act is national, given the federal nature of customs regulation in Australia. The Act does not impose any liabilities on individuals or entities other than the Commonwealth and does not disadvantage any person's rights as at the date of registration of the TCO. Additionally, the Act allows for the possibility of subordinate instruments to further detail the application and enforcement of the concessions provided.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1140118 (TCO No. 1140118) under the Customs Act 1901 (sections 269C, 269B, 269P(3), and 269K(1)) establish the conditions for the creation of a Tariff Concession Order (TCO). Specifically, section 269C stipulates that a TCO application meets core criteria if no substitutable goods were produced in Australia at the time of application. Section 269B defines the terms "goods produced in Australia," "ordinary course of business," and "substitutable goods," while section 269P(3) mandates the CEO to issue a written order if the core criteria are satisfied. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the proposed TCO. This TCO No. 1140118 was made on 13 February 2012, declaring certain dispensing machines as goods to which item 50 of Schedule 4 to the Tariff applies, thereby exempting them from a 5% duty rate.
The Act imposes several obligations and requirements on the parties involved. The applicant must ensure that the goods in question do not have substitutable equivalents produced in Australia at the time of application, as per sections 269C and 269D. The CEO is required to assess the application against these criteria and make a decision based on the information provided. Upon making a TCO, the CEO must publish a notice in the Gazette (section 269K(1)), inviting public submissions and ensuring transparency in the process. The CEO's role is critical in determining whether the application meets the core criteria and subsequently issuing the TCO.
The Act also delineates consequences for non-compliance or breaches related to the TCO. While the explanatory statement does not explicitly state offences or penalties, breaches of customs regulations generally attract penalties under the Customs Act 1901. For instance, knowingly or recklessly making a false statement in an application for a TCO could potentially lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The specifics of penalties are usually outlined in the Customs Act itself, which may impose fines or imprisonment terms commensurate with the nature and extent of the breach.
Overall, TCO No. 1140118 provides a clear framework for granting tariff concessions on certain dispensing machines, ensuring that the process is transparent, and the rights of importers are protected. The Act's provisions ensure that the TCO does not impose any new liabilities on persons other than the Commonwealth and that importers can benefit from duty refunds on goods imported since the effective date of the TCO.