EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0921533
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.
Moffat Pty Ltd applied for a TCO in respect of certain food processing and dispensing machines on 23 June 2009.
Instrument
TCO No 0921533 was made on 11 September 2009. It declares that those certain food processing and dispensing machines 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. 0921533 is taken to have come into force on 23 June 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. 0921533 under the Customs Act 1901 was enacted in 2010 to provide relief on customs duty for certain goods, thereby addressing the problem of potentially high tariff barriers that could hinder trade and economic efficiency. This instrument was introduced to provide a mechanism by which businesses could apply for tariff concessions, enabling them to import specific goods at a reduced duty rate if no substitutable goods are produced in Australia. The Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs, who must assess whether the application meets the core criteria, including the absence of substitutable goods produced in Australia. The policy objective is to facilitate smoother trade processes by lowering the cost of importing specific goods, thus potentially encouraging trade and economic growth.
This instrument was established by the Australian Government and commenced on the date the application was lodged, 23 June 2009, ensuring that the rights of importers are positively affected while not imposing any new liabilities on individuals or entities. The Customs Act 1901 provides the legislative framework, with the Customs Tariff Act 1995 setting out the applicable duty rates. The implementation of this instrument follows a consultation process where no objections were raised, leading to the issuance of the TCO, which exempts the specified food processing and dispensing machines from the general duty rate of 5%, setting it instead at free.
Scope and Application
The Customs Act 1901, specifically through its Tariff Concession Orders (TCOs) provisions under Part XVA, facilitates the granting of tariff concessions on imported goods, thereby reducing or eliminating customs duty rates on certain goods. This Act applies to any person or entity that applies for a TCO on behalf of goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application process involves the Chief Executive Officer of Customs (CEO) assessing whether the goods in question meet the core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business. Successful applications result in the goods being subject to a lower rate of customs duty as outlined in the relevant item of Schedule 4 to the Customs Tariff Act 1995. The geographic reach of this legislation is national, impacting importers across Australia. The application of TCOs does not retroactively affect the rights of any person, ensuring that only future imports are subject to the reduced duty rates. This Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which provides the detailed tariff schedules and rates that are applied under TCOs.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P(3) of the Customs Act 1901, which provide the criteria for the application and issuance of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must then assess whether the application meets the core criteria set out in section 269C. This section stipulates that an application will meet the criteria if, 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, they must make a written order declaring that the goods are subject to a prescribed rate of duty as specified in the order (section 269P(3)).
The obligations imposed by this Act on the parties or entities it governs include the requirement for the CEO to assess TCO applications against the core criteria outlined in section 269C. The CEO must ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on the application. The CEO must consider any submissions received before making a decision on whether to issue a TCO. The TCO itself does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities on anyone. Importers can benefit from this by applying for a refund of duty on goods imported since the TCO is taken to have come into force.
There are no specific offences, penalties, or consequences mentioned in the explanatory statement for breaches of this legislation. However, any failure to comply with the requirements for applying for or issuing a TCO could potentially lead to legal challenges or administrative actions. Given that the TCO benefits importers by potentially reducing their duty liabilities, any misuse or improper application of these concessions could be subject to scrutiny and enforcement actions by Customs. The primary consequence of non-compliance would likely be the inability to benefit from the tariff concession, thereby incurring higher duty rates on the specified goods.