EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0834254
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.
Cement Australia Holdings Pty Ltd applied for a TCO in respect of certain cement bag palletisers on 07 October 2008.
Instrument
TCO No 0834254 was made on 12 January 2009. It declares that those certain cement bag palletisers 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. 0834254 is taken to have come into force on 07 October 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 by the Australian Parliament to regulate the customs and border control aspects of international trade, including the imposition of tariffs on imported goods. In addressing the gap in the legislation that pertained to providing tariff concessions for certain imported goods, Tariff Concession Instrument No. 0834254 was introduced. This instrument was designed to facilitate lower rates of customs duty for specific goods that do not have substitutable domestic alternatives, thereby supporting industries by reducing the cost of imported goods necessary for their operations. The instrument was made under the authority of the Chief Executive Officer of Customs, who is mandated to assess and approve applications for tariff concessions based on the criteria set out in the Act. The objective of this instrument was to ensure that industries which rely on imported goods for their production processes benefit from tariff relief, thereby enhancing their competitiveness without imposing any liabilities on third parties or affecting existing rights as at the date of registration.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism allows for the application of lower rates of customs duty on specified goods, provided certain criteria are met. Specifically, an applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. Cement Australia Holdings Pty Ltd recently applied for, and was granted, a TCO for certain cement bag palletisers, resulting in a reduction of customs duty from the general rate of 5% to zero. This TCO came into force on the date the application was lodged, 7 October 2008, and benefits importers by potentially allowing them to claim refunds of duty paid on the specified goods imported since that date. The Act ensures that the rights of non-Commonwealth entities are protected, and no new liabilities are imposed as a result of the TCO. The CEO is mandated to publish notices in the Gazette, inviting submissions on TCO applications, although in this case, no objections were received.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0834254 under the Customs Act 1901 (section 269F) relate to the application process for Tariff Concession Orders (TCOs) and the criteria that must be met for such orders to be made. Section 269F enables a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which outlines goods that cannot be subject to a TCO. The CEO must determine whether the application meets the core criteria set out in section 269C, which requires that, 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 these criteria, a TCO must be made (section 269P(3)).
The obligations imposed by the Customs Act 1901 on parties applying for a TCO include ensuring that the application is made in accordance with section 269F and that the goods in question are not specified in section 269SJ. The CEO has a duty to assess whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Once the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to a TCO (section 269P(3)). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, no submissions were received.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not specify particular penalties for failing to comply with the provisions related to TCOs. However, general contraventions of the Customs Act may attract civil or criminal penalties, depending on the nature and seriousness of the breach. The Act itself does not detail specific penalties for breaches related to TCOs, but it is clear that any failure to comply with the statutory requirements could potentially lead to enforcement actions, including fines or other legal consequences. The Tariff Concession Instrument No. 0834254 specifies that the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.