EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922135
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 moulding and freezing machines on 29 June 2009.
Instrument
TCO No 0922135 was made on 11 September 2009. It declares that those certain moulding and freezing 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. 0922135 is taken to have come into force on 29 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties and other charges on imported and exported goods. One of the provisions of this Act, specifically Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism was introduced to address the need for reduced customs duty rates on certain imported goods under specific circumstances. The policy objective behind TCOs is to ensure that Australian industries can access necessary imported goods at a reduced cost, thus maintaining competitiveness and supporting economic efficiency. The Tariff Concession Instrument No. 0922135, issued on 11 September 2009, is an example of this process in action, where a TCO was granted for certain moulding and freezing machines following an application by Moffat Pty Ltd, resulting in a tariff rate reduction from 5% to free duty.
Scope and Application
The Customs Act 1901, under Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on specific goods. A TCO applies to the goods specified in the order and is made if the CEO is satisfied that the application for the concession meets the core criteria, notably that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This Act applies to any person or entity that seeks to import goods eligible for a tariff concession, specifically those not produced domestically in an ordinary business course. The application process involves lodging an application with the CEO, who must then consider whether the application meets the specified criteria and whether any submissions have been made against it. The CEO must publish a notice in the Gazette inviting submissions, and if none are received, may proceed to make the TCO. The TCO has a retroactive effect, taken to have come into force on the day the application was lodged, benefiting importers by allowing them to apply for a refund of duty on goods imported since the effective date. The TCO does not affect any pre-existing rights or impose liabilities on anyone other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0922135, made under the Customs Act 1901, applies to certain moulding and freezing machines. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C of the Act, the CEO must make a written order that declares the goods are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995. This order reduces the duty on the goods to zero, whereas the general rate of duty is 5%.
The Act imposes several obligations on the parties involved. Firstly, as per section 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received. Additionally, section 269S(1) of the Act specifies that a TCO comes into force on the day the application is lodged, which was 29 June 2009 for TCO No. 0922135. The Act also ensures that the TCO does not affect the rights of any person other than the Commonwealth adversely, nor does it impose any liabilities on any person other than the Commonwealth for actions taken before the TCO was registered.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches of the TCO provisions. However, it is implied that any misuse or improper application of the TCO could lead to legal consequences. The TCO itself provides a clear benefit by reducing the duty on specified goods, but it does not create any new liabilities for individuals or entities other than the Commonwealth. Importers can apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.