EXPLANATORY STATEMENT
Tariff Concession Instrument No.0503781
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 parts for turning, loading and unloading machines on 6 April 2005.
Instrument
TCO No 0503781 was made on 10 June 2005. It declares that those certain parts for turning, loading and unloading 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. 0503781 is taken to have come into force on 6 April 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 Tariff Concession Instrument No. 0503781 was enacted in 2005 under the Customs Act 1901 to provide tariff concessions on certain goods, specifically certain parts for turning, loading, and unloading machines. This legislation was introduced to address the gap in the tariff system by allowing for reduced customs duty rates for specified goods where there are no substitutable goods produced in Australia. The instrument was made by the Chief Executive Officer of Customs, in accordance with the requirements of the Customs Act, which mandates that the CEO must consider applications for tariff concession orders and determine whether they meet the core criteria. The policy objective is to facilitate trade and support Australian businesses by reducing the cost of importing specific goods that are not produced domestically.
The instrument was brought into force on the date the application was lodged, 6 April 2005, and no submissions were received in opposition to the concession. Importantly, the legislation does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, ensuring that it operates within the bounds of existing trade frameworks while providing relief to importers.
Scope and Application
The Tariff Concession Instrument No. 0503781, issued under the Customs Act 1901, pertains to the application and approval of a Tariff Concession Order (TCO) for specific goods, in this case certain parts for turning, loading, and unloading machines, submitted by Joe White Maltings Pty Ltd on 6 April 2005. The Act applies to the Chief Executive Officer of Customs, who is responsible for evaluating applications for TCOs and determining whether they meet the core criteria. These criteria include the absence of substitutable goods produced in Australia at the time the application is lodged. Once the CEO is satisfied that the application meets these criteria, they are mandated to issue a TCO, thereby applying a lower rate of customs duty to the specified goods. This particular TCO, effective from 6 April 2005, grants a duty-free status to the aforementioned parts, which otherwise attract a 5% duty rate.
The geographic and jurisdictional reach of the Customs Act 1901 is national, governing customs duties across Australia. The Act does not specify exclusions or exemptions beyond those outlined in section 269SJ, which identifies goods that cannot be subject to a TCO. The application of the Act is not restricted by state or territory boundaries, applying uniformly across the Commonwealth. The Act can extend its application through subordinate instruments, such as regulations, which provide further details on the administration and implementation of TCOs. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons for actions taken before its registration.
Key Provisions
The key operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods (s 269F). The application process is further defined by section 269SJ, which specifies the types of goods that cannot be subject to a TCO (s 269SJ). Once an application is deemed valid, section 269C outlines the core criteria that must be met, such as ensuring no substitutable goods are produced in Australia in the ordinary course of business (s 269C). If these criteria are met, the CEO must make a written order under section 269P(3), declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (s 269P(3)). This instrument, TCO No. 0503781, declares that certain parts for turning, loading and unloading machines are subject to a free rate of duty as opposed to the general rate of 5% (s 269P(3)).
The obligations and requirements imposed by the Act on the parties it governs include the necessity for applicants to ensure their TCO applications meet the core criteria as specified in section 269C (s 269C). This involves demonstrating that no substitutable goods are produced in Australia in the ordinary course of business, with specific definitions provided in sections 269D, 269E, and 269F. The CEO must also ensure that any TCO application is not in respect of goods specified in section 269SJ, which sets out those goods that cannot be subject to a TCO (s 269SJ). Furthermore, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (s 269K(1)). This ensures transparency and provides an opportunity for interested parties to voice their concerns.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the Act for the breach of the provisions regarding TCOs. However, the failure to meet the core criteria as specified in section 269C would result in the CEO not being able to make the TCO, thereby leaving the general rate of duty in place (s 269C). Additionally, if a TCO is made in error or without meeting the statutory requirements, it could potentially lead to legal challenges or administrative reviews. While no specific penalties are outlined in the Act, any improper or fraudulent application could attract broader legal consequences under general administrative law principles or other relevant legislation.