EXPLANATORY STATEMENT
Tariff Concession Instrument No.0503521
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 germination vessel or kiln parts on 22 March 2005.
Instrument
TCO No 0503521 was made on 10 June 2005. It declares that those certain germination vessel or kiln 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. 0503521 is taken to have come into force on 22 March 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 Commonwealth Parliament to provide a comprehensive framework for the administration of customs and excise duties in Australia. The Act includes provisions for the imposition of tariffs and the establishment of a tariff concession scheme to encourage the production of certain goods within Australia by offering reduced customs duty rates. This legislative framework allows for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to specific goods, provided no substitutable goods are produced in Australia in the ordinary course of business. The policy objective behind this scheme is to support local production and enhance the competitiveness of Australian industries by reducing the cost of importing goods that could otherwise be manufactured domestically. The Tariff Concession Instrument No. 0503521, made under this Act, addresses the specific issue of applying tariff concessions to certain germination vessel or kiln parts, thereby encouraging their production in Australia and providing relief to importers of these goods.
Scope and Application
The Tariff Concession Instrument No. 0503521 under the Customs Act 1901 applies to specific goods, in this case certain germination vessel or kiln parts, for which a Tariff Concession Order (TCO) has been applied and approved by the Chief Executive Officer of Customs. This legislation affects importers of these particular goods by providing them with a lower rate of customs duty, in this instance, reducing the duty from 5% to free. The application of this TCO is based on the criteria outlined in the Customs Act 1901, specifically ensuring that no substitutable goods were produced in Australia on the date the application was lodged. The TCO does not extend to any goods specified in section 269SJ of the Act, which are ineligible for such concessions. The scope of this legislation is national, as it falls under the Commonwealth’s jurisdiction, and it does not disadvantage any person by imposing liabilities for actions taken prior to the TCO’s registration date. The rights of importers are positively affected, allowing them to apply for duty refunds on imports made since the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901 concerning Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO, which would then result in a lower rate of customs duty being applied to the specified goods if the application is approved. Section 269C details the core criteria that must be met for the application to be approved, primarily focusing on the non-production of substitutable goods in Australia. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) under section 269P, which specifies the reduced duty rate. This process is formalised under section 269S, which dictates that the TCO is considered to come into force on the day the application was lodged.
The Act imposes specific obligations and requirements on both the CEO and the applicant. For the CEO, these include accepting valid applications, ensuring that the core criteria are met, and publishing notices in the Gazette to allow for objections. For applicants, the primary requirement is to demonstrate that the goods in question are not substitutable by Australian-made products, and that the application complies with the procedural requirements outlined in the Act. The CEO must also consider any submissions received in response to the Gazette notice before making a decision.
Under the Customs Act 1901, breaches of the Act or its regulations can result in both civil and criminal penalties. For example, section 269SJ lists goods that cannot be subject to a TCO, and any attempt to apply for a TCO for these goods would be an offence. Penalties for such breaches can include fines and, in more severe cases, imprisonment. Specifically, the maximum penalties for contravening the Act can vary but often include substantial fines up to thousands of dollars, as well as imprisonment terms depending on the severity of the offence. Civil penalties may also apply, such as financial penalties for incorrect declarations or failure to comply with the provisions of the Act.
Overall, the Customs Act 1901, through its provisions on TCOs, aims to facilitate trade by reducing customs duties on specified goods while ensuring that the process is fair and transparent. The Act provides a structured approach for both applicants and the CEO, with clear obligations and consequences for non-compliance. This ensures that the scheme operates within the legal framework designed to balance trade facilitation with regulatory oversight.