EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840224
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.
Farmtech Pty Ltd applied for a TCO in respect of certain grainfed self propelled packing machine on 18 November 2008.
Instrument
TCO No 0840224 was made on 06 February 2009. It declares that those certain grainfed self propelled packing machine 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. 0840224 is taken to have come into force on 18 November 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 Tariff Concession Instrument No. 0840224, introduced under the Customs Act 1901, was enacted to provide tariff concessions on certain grainfed self propelled packing machines, effective from 18 November 2008. The Tariff Concession Orders (TCOs) scheme, outlined in Part XVA of the Customs Act, allows the Chief Executive Officer of Customs to reduce customs duty rates on goods that meet specific criteria, namely that no substitutable goods are produced in Australia at the time of application. Farmtech Pty Ltd applied for a TCO for their specified machinery, and upon satisfaction of the core criteria, the CEO issued TCO No. 0840224 on 6 February 2009, setting the duty rate at free, down from the general rate of 5%. This concession was made without any submissions opposing the order, thereby benefiting importers by potentially allowing them to claim refunds on duties paid prior to the concession's effective date.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying lower rates of customs duty on specified goods. This Act applies to any person or entity seeking to import goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The scope of the Act encompasses both individuals and businesses that engage in the importation of goods, particularly those who apply for tariff concessions. The geographic reach of this legislation is national, as it pertains to customs duties across Australia. The Act includes a provision for the CEO to make subordinate instruments to further detail the application and enforcement of TCOs. Any exclusions or exemptions from this legislation are specified in section 269SJ, which lists goods that cannot be subject to a TCO. The application process requires that the CEO ensures no substitutable goods are produced in Australia before granting a TCO, with the effective date of the TCO being the date the application is lodged.
Key Provisions
The key sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCO) are section 269F, which allows for applications for a TCO to be made to the Chief Executive Officer of Customs (CEO) (section 269F), and section 269C, which sets out the core criteria that must be met for a TCO to be made (section 269C). The CEO must consider whether the application meets the core criteria, which include that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C and 269P(3)). If the CEO is satisfied that the application meets these criteria, a TCO must be made (section 269P(3)).
The Act imposes certain obligations on the parties involved. The CEO must ensure that the application meets the core criteria (section 269C) and must publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made (section 269K(1)). Once a TCO is made, it is taken to have come into force on the day the application for the TCO was lodged (subsection 269S(1)). Additionally, the Act ensures that 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 (subsection 269T(2)).
There are no explicit offences or penalties mentioned in the Act for breaches of the TCO provisions. However, the Act does provide for the refund of duty to importers of goods subject to a TCO for goods imported since the day on which the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). This provision suggests that while there may not be direct penalties for failing to comply with the TCO provisions, there are remedies available for those who have been adversely affected by the concession.
In conclusion, the Customs Act 1901 provides a structured process for the application and implementation of Tariff Concession Orders, ensuring that the interests of all parties are considered and that the rights of importers are protected. The Act outlines clear criteria for the CEO to follow in determining whether to grant a TCO and sets out the consequences of making a TCO, including the ability for importers to apply for a refund of duty. The absence of specific penalties for non-compliance suggests that the focus is on providing relief and ensuring that the rights of importers are not adversely affected.