EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840334
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 soil screening line on 19 November 2008.
Instrument
TCO No 0840334 was made on 06 February 2009. It declares that those certain soil screening line 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. 0840334 is taken to have come into force on 19 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. 0840334 was enacted under the Customs Act 1901 to address a gap in tariff concessions for specific goods. The Act, enacted by the Australian Parliament, provides a framework through which the Chief Executive Officer of Customs can establish Tariff Concession Orders (TCOs) to offer lower rates of customs duty for certain goods. This instrument was introduced to facilitate trade by reducing the duty on goods that do not have substitutable Australian-produced alternatives, thereby encouraging importation and potentially lowering costs for businesses and consumers. The policy objective is to ensure that the duty applied to these goods is reflective of their unique status in the market, free from the competitive pressures that might otherwise exist if locally produced alternatives were available.
The instrument was made on 6 February 2009, following an application by Chrysco Flowers Pty Ltd for a TCO concerning certain soil screening lines. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO. As a result, the instrument declares that these soil screening lines are subject to a duty rate of free, down from the general rate of 5%. This instrument came into force on 19 November 2008, the date the application was lodged, and benefits importers by potentially allowing them to apply for a refund of duty on goods imported since that date, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0840334 under the Customs Act 1901 applies to goods for which an applicant has sought a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO). This applies specifically to the certain soil screening line for which Chrysco Flowers Pty Ltd applied, resulting in the CEO making a TCO on 6 February 2009. The Act allows for a lower rate of customs duty on goods that are the subject of a TCO, provided certain core criteria are met. The application process requires the CEO to ensure that no substitutable goods are produced in Australia in the ordinary course of business, which was satisfied in this case, leading to a declaration that the soil screening lines are subject to a free duty rate rather than the general 5% duty. The geographic reach of this legislation is national, as it pertains to goods entering Australia under the Customs Act 1901. The Act does not specify exclusions but implicitly excludes goods that are already being produced in Australia or those specified in section 269SJ, which cannot be subject to a TCO. The application of this Act may be extended or restricted through subordinate instruments, but the primary legislation provides the foundational criteria and process for such concessions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0840334 (F2009L00644) are sections 269C, 269P, and 269SJ of the Customs Act 1901. These sections outline the criteria for making a Tariff Concession Order (TCO) and the application process. Specifically, section 269C requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged for the TCO to be approved. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, a written order (a TCO) must be made, specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Finally, section 269SJ specifies the goods that cannot be subject to a TCO.
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269F allows a person to apply to the CEO for a TCO in respect of goods. If the CEO accepts the application, they must determine whether it meets the core criteria as specified in section 269C. If the application is valid, the CEO must make a TCO as required by section 269P. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. This ensures transparency and allows for public input before a TCO is made.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations may lead to civil and criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs laws generally carry significant penalties. For example, under section 214 of the Customs Act 1901, the maximum penalty for attempting to import or export goods without a licence or in breach of a licence condition can be substantial. The Act provides for fines and imprisonment, with the exact penalties depending on the severity and circumstances of the offence. It is also worth noting that the TCO itself does not impose any liabilities on any person, as stated under section 269S(1) of the Act.