EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0928763
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.
Tapex Pty Ltd applied for a TCO in respect of certain silage tubes on 07 August 2009.
Instrument
TCO No 0928763 was made on 30 October 2009. It declares that those certain silage tubes 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. 0928763 is taken to have come into force on 07 August 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 Commonwealth Parliament, establishes the framework for managing customs duties in Australia, including provisions for Tariff Concession Orders (TCOs) to encourage trade and industry. The Tariff Concession Instrument No. 0928763, introduced in 2009, addresses the gap by allowing the Chief Executive Officer of Customs to grant tariff concessions on specific goods, thereby reducing customs duties for those goods. This instrument was designed to facilitate trade by lowering the cost of importing certain goods, ensuring they are not produced in Australia and that there are no suitable substitutes. The policy objective is to support Australian industries by providing tariff relief on non-substitutable imported goods, thereby encouraging trade without adversely affecting domestic production.
Scope and Application
The Tariff Concession Instrument No. 0928763 under the Customs Act 1901 applies to specific goods, in this instance certain silage tubes, that are subject to a Tariff Concession Order (TCO). The Act allows for the application of lower rates of customs duty on goods specified in a TCO, provided the application meets core criteria outlined in the Act, specifically that no substitutable goods were produced in Australia at the time the application was lodged. The geographic and jurisdictional reach of this Act is Commonwealth, meaning it applies nationally across Australia. The Act does not specify any exclusions, exemptions, or thresholds beyond those already mentioned. The scope of the Act can be extended or restricted through subordinate instruments, which may provide further detail on the types of goods eligible for a TCO and the criteria for such concessions. This legislative framework ensures that the application process for tariff concessions is transparent and subject to public scrutiny through the requirement for the CEO to publish notices in the Gazette and invite submissions from interested parties.
Key Provisions
The Tariff Concession Instrument No. 0928763, made under the Customs Act 1901, establishes a Tariff Concession Order (TCO) for certain silage tubes (s269C, s269P(3)). This TCO, which was applied for by Tapex Pty Ltd on 7 August 2009 and made on 30 October 2009, declares that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate for these goods. The general duty rate for these goods is 5%, but the TCO reduces this to free.
The obligations imposed by the Act on the parties involved are relatively straightforward. The Chief Executive Officer of Customs (CEO) must assess applications for TCOs to ensure they meet the core criteria outlined in section 269C of the Act. This involves confirming that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged (s269C, s269D, s269E). If the application meets these criteria, the CEO is mandated to make a written order declaring the goods subject to the TCO (s269P(3)). In this case, the CEO determined that no substitutable goods were produced in Australia, and therefore made the TCO effective from 7 August 2009, the date the application was lodged (s269S(1)).
Upon accepting a TCO application, the CEO must also publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made (s269K(1)). In this instance, no submissions were received, indicating a general acceptance of the TCO's validity. The TCO does not affect the rights of any person, except the Commonwealth, as at the date of registration, ensuring that no one is disadvantaged or incurs liabilities for actions taken before the TCO's effective date (s269S(1)).
In terms of potential breaches and consequences, the Act does not explicitly outline specific offences or penalties for non-compliance with the TCO provisions. However, general provisions of the Customs Act 1901 apply, which may include fines and imprisonment for offences related to customs duty and the importation of goods. The maximum penalties for such offences can vary, but they typically include substantial fines and/or imprisonment, depending on the severity of the breach. Importers who have already paid duty on the goods since the TCO's effective date can apply for a refund under paragraph 126(1)(r) of the Regulations, further highlighting the importance of compliance with the TCO provisions.