EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909326
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.
Smiths Snackfood Company applied for a TCO in respect of certain twin screw extruders on 19 March 2009.
Instrument
TCO No 0909326 was made on 29 May 2009. It declares that those certain twin screw extruders 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. 0909326 is taken to have come into force on 19 March 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. 0909326, made under the Customs Act 1901, was enacted in 2009 to provide tariff concessions for specific goods, in this case, certain twin screw extruders, thereby addressing the need for a more streamlined and efficient customs duty process for certain imported items. This instrument was introduced to facilitate smoother trade by reducing the customs duty on specified goods, which in turn benefits businesses by lowering their importation costs. The instrument was developed and enacted by the Chief Executive Officer of Customs following an application by Smiths Snackfood Company on 19 March 2009, and it came into force on the same date. The policy objective here is to ensure that the Australian economy remains competitive by allowing for tariff reductions where appropriate, thereby encouraging trade and investment.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person who applies for a TCO for goods that are not specified in section 269SJ of the Act, which excludes certain types of goods from eligibility. The Act imposes a condition that a TCO can only be granted if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The geographic scope of this Act is national, as it pertains to the customs regulations across Australia. The Act does not disadvantage existing rights or impose liabilities on persons other than the Commonwealth. The Tariff Concession Instrument No. 0909326 applies to specific twin screw extruders, providing a concession that reduces the duty rate from the general 5% to free, contingent on the CEO's satisfaction that no substitutable goods were produced in Australia at the time of application. This instrument came into effect on 19 March 2009, the date the application was lodged.
Key Provisions
The key sections of this legislation, as outlined in the Explanatory Statement, revolve around the process and criteria for making a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F (1) allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is deemed valid and does not concern goods specified in section 269SJ, which are ineligible for TCOs, the CEO must assess whether the application meets the core criteria stipulated in section 269C. This core criterion requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E.
The obligations imposed on parties by this Act are primarily on the CEO, who is tasked with ensuring that the application for a TCO is valid and meets the specified criteria. Upon receiving an application, the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections to the making of the TCO, as required by subsection 269K(1). If no submissions are received, the CEO is then required to make the TCO if the criteria are met, as per section 269P(3). The CEO is also responsible for ensuring that the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, as stipulated in subsection 269S(1).
In terms of breaches and penalties, the Explanatory Statement does not explicitly detail specific offences or penalties associated with non-compliance with the provisions of the Act. However, it does note that the TCO does not impose any liabilities on any person, implying that the main consequence of failing to comply with the Act's provisions would likely involve the failure to obtain the intended tariff concession. Importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as outlined in paragraph 126(1)(r) of the Regulations. This suggests that the primary remedy for any procedural misstep would be the lack of tariff benefits rather than a formal penalty or sanction.