EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902648
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.
Delaval applied for a TCO in respect of certain voluntary milking systems on 27 January 2009.
Instrument
TCO No 0902648 was made on 24 April 2009. It declares that those certain voluntary milking systems 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. 0902648 is taken to have come into force on 27 January 2009.
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. 0902648, enacted under the Customs Act 1901, was introduced to address the need for a streamlined process to provide tariff concessions for specific goods. This instrument was developed to facilitate applications for Tariff Concession Orders (TCOs) by allowing the Chief Executive Officer of Customs to grant lower rates of customs duty on certain goods, provided no substitutable goods are produced in Australia. This mechanism is designed to promote the importation of specialised goods by reducing their duty rates, thereby encouraging economic activities related to those goods. The instrument was enacted by the relevant authority within the Australian government, ensuring that the process for tariff concessions is both efficient and transparent. The primary policy objective of this legislation is to support importers and Australian businesses by lowering the cost of importing specific goods, ultimately contributing to the broader economic benefits of facilitating trade.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative framework allows for the application of a lower rate of customs duty on goods specified in a TCO. Any person may apply to the CEO for a TCO in respect of goods, provided the goods are not listed in section 269SJ, which excludes certain goods from eligibility for a TCO. The CEO must assess whether the application meets the core criteria, notably ensuring that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E and 269F of the Act. If the criteria are satisfied, the CEO issues a TCO, specifying the applicable customs duty rate as outlined in the Customs Tariff Act 1995. This process was exemplified by the concession granted to Delaval regarding certain voluntary milking systems, where the duty rate was reduced to free following the issuance of TCO No. 0902648 on 24 April 2009. The TCO's commencement date aligns with the application date, 27 January 2009, and it does not retroactively disadvantage or impose liabilities on any person other than the Commonwealth.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0902648 pertain to the establishment and application of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). This legislation allows for reduced customs duty rates on specified goods, provided certain criteria are met. Specifically, section 269C stipulates that an application for a TCO will be considered if no substitutable goods are produced in Australia in the ordinary course of business. This means that the goods in question cannot be readily replaced by Australian-made alternatives. Under section 269P(3), if the Chief Executive Officer of Customs is satisfied that the application meets these criteria, they must issue a TCO.
The Act imposes several obligations on the parties involved. For instance, applicants must ensure their goods meet the criteria for a TCO, which involves demonstrating that no substitutable goods are produced in Australia (section 269C). The CEO is required to make a decision based on this application and, if the criteria are met, issue a TCO. Furthermore, the CEO must publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). The CEO must also consider any submissions received in response to this notice. The TCO, once made, has a specific commencement date, which is the day the application was lodged (subsection 269S(1)).
In terms of consequences for non-compliance, the Act does not explicitly state penalties for breaches related to the issuance or application of TCOs. However, failure to comply with the conditions set forth in the TCO could potentially result in legal actions or disputes. For instance, if an entity falsely claims that no substitutable goods are produced in Australia, they could face legal consequences for misrepresentation. Additionally, any misuse or improper application of a TCO could lead to civil or criminal liabilities, although specific penalties are not detailed within this legislation.
Overall, the Tariff Concession Instrument No. 0902648 facilitates reduced customs duty rates for specific goods, provided they meet the outlined criteria. The Act imposes clear obligations on applicants and the CEO, ensuring a transparent process for issuing TCOs. While the legislation does not detail specific penalties for breaches, non-compliance with the terms of a TCO could result in legal repercussions.