EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933115
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.
Barrett Burston Malting Pty Ltd applied for a TCO in respect of certain germination kiln parts on 07 September 2009.
Instrument
TCO No 0933115 was made on 27 November 2009. It declares that those certain germination kiln parts 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. 0933115 is taken to have come into force on 07 September 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, governs the importation and exportation of goods and the collection of customs duty. To provide flexibility and encourage trade, Part XVA of the Act allows for Tariff Concession Orders (TCOs) which lower the rate of customs duty on certain goods. The Tariff Concession Instrument No. 0933115 was introduced to address the need for tariff concessions on specific goods, in this case, germination kiln parts, where no substitutable goods were being produced in Australia. The Chief Executive Officer of Customs was satisfied that the application met the core criteria, leading to the issuance of this instrument which provides a zero rate of duty on these goods. This initiative aims to support businesses by reducing import costs and enhancing the competitiveness of Australian products in the global market.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs), which are instrumental in providing lower rates of customs duty on certain goods. These orders are made by the Chief Executive Officer of Customs upon application and subsequent satisfaction that the goods in question meet specific criteria, primarily that no substitutable goods are produced in Australia at the time of application. This Act applies to any person or entity seeking to import goods that are not excluded by section 269SJ and must meet the core criteria outlined in sections 269C, 269B, and 269D of the Act. The application and enforcement of TCOs are governed nationally, ensuring uniformity across Australia. Notably, the Act ensures that no existing rights or liabilities of persons other than the Commonwealth are adversely affected by the issuance of a TCO, thereby protecting the interests of importers who may apply for refunds of duties paid prior to the TCO's effective date. The scope of the Act can be further refined through subordinate instruments, which may provide additional clarity or detail on specific applications or interpretations of the legislation.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0933115 under the Customs Act 1901 (section 269F) require the Chief Executive Officer of Customs (CEO) to consider applications for Tariff Concession Orders (TCO) in respect of certain goods. If the application meets the core criteria, as outlined in section 269C, the CEO must make a written TCO. The CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C. If satisfied, the CEO must declare the goods to which the TCO applies (section 269P(3)). For example, TCO No. 0933115, made on 27 November 2009, declared that certain germination kiln parts are subject to a free rate of duty, as no substitutable goods were produced in Australia.
The obligations under this Act require Barrett Burston Malting Pty Ltd to apply for a TCO if they believe the goods they wish to import do not have Australian substitutes and are eligible for tariff concessions. The CEO must then review the application and, if eligible, issue the TCO. The CEO is also obligated to publish a notice in the Gazette, inviting submissions from any interested parties who may object to the TCO being issued, as per subsection 269K(1). The TCO does not disadvantage any person or impose liabilities in respect of actions taken before its registration, as stated in subsection 269S(1).
Breaches of the provisions under the Customs Act 1901 may result in penalties. However, the explanatory statement does not detail specific offences or penalties for non-compliance with the TCO. Typically, the Act may impose civil or criminal penalties for incorrect declarations, fraudulent applications, or failure to comply with the terms of a TCO. The exact penalties would depend on the nature and severity of the breach, as outlined in the Customs Act 1901 and the Customs Regulations 1996.