EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502574
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.
Joe White Maltings Pty Ltd applied for a TCO in respect of certain malting kiln heat exchangers on 25 February 2005.
Instrument
TCO No 0502574 was made on 6 May 2005. It declares that those certain malting kiln heat exchangers 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 3%.
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. 0502574 is taken to have come into force on 25 February 2005.
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 enacted by the Parliament of Australia and established a framework for the administration of customs duties. This Act was designed to address the need for a structured system of customs duty collection and regulation, ensuring that the government could effectively control imports and protect domestic industries. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act provides a mechanism by which the Chief Executive Officer of Customs can grant tariff concessions on certain goods, thereby reducing the customs duty applicable to them. The policy objective of this legislative framework is to facilitate international trade while also protecting Australian industries by ensuring that imported goods do not unfairly compete with locally produced substitutes. The explanatory statement regarding Tariff Concession Instrument No. 0502574 highlights the process by which Joe White Maltings Pty Ltd successfully applied for a tariff concession on specific malting kiln heat exchangers, illustrating the practical application of the TCO scheme within the Customs Act.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply reduced rates of customs duty to certain goods. This mechanism is designed to benefit industries by lowering the duty on specific imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The Act mandates that an application for a TCO must be made by a person, and if it meets the core criteria specified in the Act, the CEO must issue a written order granting the concession. Notably, the application process requires the CEO to ensure that the goods in question are not among those specified in section 269SJ of the Act, which excludes certain goods from TCO consideration. The geographic reach of this Act is national, as it applies across Australia, and it is administered under the Commonwealth jurisdiction. The application of this legislation can be further extended or restricted through subordinate instruments, which may include regulations or other statutory rules that provide additional detail or specify particular circumstances under which the TCOs can be applied or withheld. The Act does not disadvantage any person other than the Commonwealth and does not impose liabilities for actions taken before the TCO is registered.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0502574 under the Customs Act 1901 pertain to the process of applying for and making Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) requires the CEO to make a written TCO if satisfied that the application meets the core criteria, effectively lowering the customs duty rate on the specified goods.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to assess whether a TCO application meets the core criteria, specifically ensuring that no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as per section 269K(1). Additionally, section 269S(1) requires that a TCO is deemed to come into force on the day the application was lodged.
The Act imposes various obligations on the CEO, including the duty to decide whether an application for a TCO meets the core criteria and to make a written order if satisfied. Furthermore, section 269K(1) obligates the CEO to publish a notice in the Gazette inviting submissions regarding the TCO application. The obligations on applicants include providing sufficient information to substantiate their claims that no substitutable goods were produced in Australia in the ordinary course of business.
Regarding offences, penalties, or consequences for breach, the Act does not explicitly state criminal or civil penalties for failing to comply with the TCO provisions. However, the Act does provide for the potential for refunds under Regulation 126(1)(r) for importers of goods subject to a TCO, allowing them to reclaim duties paid in error since the TCO's effective date. Non-compliance with the TCO requirements, such as incorrect information provided in an application, could lead to the TCO being invalidated or the applicant facing legal challenges if their claims are found to be unsubstantiated.