EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800150
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.
CSR Building Products Limited applied for a TCO in respect of certain free standing bucket elevator on 03 January 2008.
Instrument
TCO No 0800150 was made on 25 March 2008. It declares that those certain free standing bucket elevators 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. 0800150 is taken to have come into force on 03 January 2008.
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, establishes a framework for administering customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders provide reduced customs duty rates for specific goods, contingent on the absence of Australian-made alternatives. The policy objective of this legislation is to promote economic efficiency and competitiveness by enabling the import of goods that are not produced domestically. Tariff Concession Instrument No. 0800150 was introduced to provide a tariff concession for certain free standing bucket elevators, reducing the duty rate from 5% to free. This was achieved after the Chief Executive Officer of Customs determined that no suitable Australian-made alternatives existed, and no objections were raised during the consultation period. The instrument came into force on the date the application was lodged, 3 January 2008, and benefits importers by allowing them to claim refunds on duties paid on these goods since that date.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0800150, provides a framework for the application of tariff concessions on certain goods by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import specific goods that meet the criteria for a Tariff Concession Order (TCO). The geographic and jurisdictional reach of this legislation is national, as it pertains to the Commonwealth and the customs duties administered under the Customs Act 1901. The legislation allows for the reduction or exemption of customs duty on specified goods if no substitutable goods are produced in Australia in the ordinary course of business, thus ensuring that local production is not unduly disadvantaged. The Act excludes goods listed in section 269SJ from the scope of TCOs, which are those that cannot be subject to tariff concessions. The application and interpretation of the Act may be further refined through subordinate instruments, which can detail specific criteria and procedures for applying tariff concessions. The commencement of the TCO is effective from the date of the application, and it does not affect existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Order No. 0800150, under the Customs Act 1901, primarily operates to reduce the customs duty rate for specific goods, in this case, certain free-standing bucket elevators, from the general rate of 5% to a rate of duty that is free (Sections 269F, 269P(3)). This is achieved by declaring these goods as subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995, which specifies the reduced duty rate (Section 269P(3)). This concession is effective from the date the application for the tariff concession was lodged, which in this instance was 3 January 2008 (Subsection 269S(1)). The concession does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities on them in respect of anything done or omitted to be done before the registration date (Subsection 269S(2)).
The Act imposes certain obligations on the Chief Executive Officer of Customs (CEO) and on applicants for a Tariff Concession Order (TCO). The CEO must ensure that the application for a TCO does not pertain to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions (Section 269F). The CEO must also determine whether the application meets the core criteria set out in sections 269B and 269C of the Act, which include verifying that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged (Sections 269B, 269C, 269D, 269E). If the CEO is satisfied that the application meets the criteria, they must make a written order declaring the goods subject to the TCO (Subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may object to the TCO being made (Subsection 269K(1)).
For applicants, the process involves submitting a valid application to the CEO, ensuring it meets the eligibility criteria as outlined in the Act (Section 269F). The applicant must also be aware of the publication requirement, which allows for public submissions, although in this case, none were received (Subsection 269K(1)). Moreover, applicants must ensure that their application includes all necessary details and documentation to support their claim for a tariff concession.
In terms of penalties and consequences for breach, the Act does not specify any civil or criminal penalties for failing to comply with the provisions related to TCOs. However, any person who does not comply with the requirements of the Act or the Regulations may face administrative actions, such as the revocation of the tariff concession or the imposition of back duties and interest. The primary consequence of non-compliance for the CEO would be failing to properly assess and process the application, which could lead to the tariff concession not being granted or being granted erroneously. For applicants, non-compliance could result in the application being rejected, leading to continued application of the higher duty rate.