EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826090
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.
Chrysco Flowers Pty Ltd applied for a TCO in respect of certain flower harvesters and or bunches on 12 August 2008.
Instrument
TCO No 0826090 was made on 31 October 2008. It declares that those certain flower harvesters and or bunches 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. 0826090 is taken to have come into force on 12 August 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, through its Tariff Concession Orders (TCOs), facilitates a mechanism whereby the Chief Executive Officer of Customs can apply a lower rate of customs duty on specified goods. Enacted by the Parliament of Australia, this Act addresses the need for tariff concessions on goods that are not produced in Australia, ensuring fair trade practices and supporting industries that rely on imported materials. This particular instrument, Tariff Concession Instrument No. 0826090, was introduced on 31 October 2008 in response to an application by Chrysco Flowers Pty Ltd concerning certain flower harvesters and bunches. The aim was to provide tariff relief by setting the duty rate at zero for these goods, provided no substitutable products were being produced domestically. The policy objective aligns with promoting economic efficiency and supporting Australian businesses by reducing import costs for essential goods not manufactured locally.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs (the CEO) to make Tariff Concession Orders (TCOs) which can apply a lower rate of customs duty on certain goods. These orders are made when the CEO determines that an application for a TCO is valid and meets the core criteria, including that no substitutable goods are produced in Australia in the ordinary course of business. The TCOs are applicable to the specific goods outlined in the application, provided those goods are not among those explicitly excluded by section 269SJ of the Act. The geographic reach of this Act applies nationally across Australia, as it is a Commonwealth legislation. The instrument, TCO No 0826090, is an example of this process in action, having been made effective from 12 August 2008, the date the application was lodged. This particular order pertains to certain flower harvesters and bunches, granting them tariff concessions under item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO’s decision to issue this TCO was made following the absence of any submissions opposing the order, as required by the Act.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0826090 include section 269F of the Customs Act 1901, which allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C states that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets the core criteria, they 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 applies. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made.
The Act imposes obligations on the CEO and the applicant. The CEO must assess whether the application meets the core criteria and make a decision on whether to grant the TCO. The applicant must provide all necessary information to support their application and be able to demonstrate that no substitutable goods were produced in Australia. The CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application. This notice must include an invitation for any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. Under section 269K(1) of the Act, the CEO must ensure that the TCO is made in accordance with the Act, and any breach of this requirement may result in penalties. However, the explanatory statement does not provide specific details about the penalties for breach of the Act. It is important for parties involved in the process to understand their obligations and the potential consequences of non-compliance to ensure a smooth and lawful application process.