EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803005
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.
Sustainable Organics applied for a TCO in respect of certain compost bagging machines on 9 April 2008.
Instrument
TCO No 0803005 was made on 11 July 2008. It declares that those certain compost bagging 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. 0803005 is taken to have come into force on 9 April 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 was enacted to provide for the regulation of customs and excise and to establish a comprehensive framework for the administration of customs duties and tariffs in Australia. The Act, as supplemented by Tariff Concession Orders (TCOs), addresses the need for a flexible and responsive system to accommodate specific trade needs and promote economic efficiency. The instrument in question, Tariff Concession Instrument No. 0803005, was introduced to provide tariff concessions for certain compost bagging machines, reducing the customs duty on these goods from 5% to free. This measure was enacted by the Chief Executive Officer of Customs in accordance with section 269F of the Customs Act 1901, which mandates the consideration of applications for tariff concessions if they meet the core criteria outlined in sections 269C and 269P of the Act. The policy objective is to support the import of goods that are not produced in Australia, thereby fostering trade and economic activity. The instrument came into effect on the date the application was lodged, 9 April 2008, and did not impose any liabilities on any person, with importers potentially eligible for duty refunds under the Customs Act 1901.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which lowers the rate of customs duty on specific goods. This legislation applies to any person who may apply for a TCO in respect of goods, provided the goods are not those specified in section 269SJ of the Act that cannot be subject to a TCO. A TCO will be granted if the CEO is satisfied that the application meets the core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. This concession extends to the Commonwealth and does not disadvantage or impose liabilities on any person for actions taken before the registration of the TCO. Importers, however, will benefit from the ability to apply for a refund of duty on goods imported since the effective date of the TCO, which is the day the application was lodged. The geographic reach of the Act is national, but the application process and the impact of the TCOs are subject to the conditions and criteria outlined in the Customs Act 1901 and related regulations. The scope of the Act may be further refined or extended through subordinate instruments, although such extensions or restrictions are not specified in the explanatory statement.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0803005 (referred to as TCO No. 0803005) include sections 269C, 269B, and 269P of the Customs Act 1901. These sections outline the criteria and process for making a Tariff Concession Order (TCO). Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B provides definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must make a written TCO order. This particular instrument, TCO No. 0803005, declares that certain compost bagging machines are subject to the TCO, reducing their duty rate from 5% to free.
The Act imposes certain obligations and requirements on both the applicants and the CEO. For applicants, it is necessary to ensure that the goods they seek a TCO for meet the criteria specified in section 269C, which involves demonstrating that no substitutable goods were produced in Australia. The CEO, on the other hand, must verify that the application complies with the core criteria and, if satisfied, must make a written TCO order. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In this case, the CEO did not receive any submissions in response to the notice.
Breach of the provisions under the Customs Act 1901 can lead to various consequences. For instance, misrepresentation in an application or any fraudulent activity related to the TCO can result in civil or criminal penalties. Although the specific penalties for breaches are not detailed in the provided text, under Australian law, breaches of customs regulations can typically lead to fines, imprisonment, or both. The exact penalties would depend on the nature and severity of the breach, as well as any relevant provisions in the broader legal framework governing customs and tariffs. The Act ensures that any rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, without imposing any liabilities on any person.