EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933116
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 0933116 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. 0933116 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 Parliament of Australia, includes provisions for the creation of Tariff Concession Orders (TCOs) to provide tariff concessions on certain goods, thereby addressing the problem of potentially high customs duty rates on goods that are not produced domestically. TCO No. 0933116 was introduced under this Act to provide relief to specific importers by reducing the customs duty rate on certain germination kiln parts from the general rate of 5% to free, effective from the date of the application on 7 September 2009. The policy objective behind this concession is to support industries by lowering the cost of imported goods, provided that no substitutable goods are produced in Australia, thereby promoting competition and economic efficiency. The Chief Executive Officer of Customs determined that the application met the core criteria and no objections were received during the consultation period.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the framework within which Tariff Concession Orders (TCOs) can be implemented by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals and entities who seek to reduce the customs duty on specific goods by applying for a TCO. The Act is concerned with the process by which such applications are assessed and approved if they meet the core criteria, which essentially require that no substitutable goods are being produced in Australia at the time of the application. The TCO mechanism applies nationally, as it is part of Commonwealth legislation. However, it is important to note that certain goods, as specified in section 269SJ of the Act, are excluded from the TCO scheme. The application of this Act can be further extended or restricted through subordinate instruments, which may provide additional details or clarifications on the types of goods eligible for TCOs and the processes involved. The TCO No. 0933116, for instance, was issued to Barrett Burston Malting Pty Ltd for certain germination kiln parts, reducing their customs duty rate to free, provided the CEO was satisfied that no substitutable goods were produced in Australia at the time of application.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). A TCO allows for a lower rate of customs duty to be applied to certain goods, provided an application is made and approved (s 269F). To qualify, the application must meet core criteria as outlined in sections 269C and 269B, which include the absence of substitutable goods produced in Australia in the ordinary course of business. If the CEO determines that the application meets these criteria, they must issue a TCO, specifying the lower rate of duty (s 269P(3)).
The obligations under this legislation require applicants to ensure that their goods meet the criteria for a TCO, which involves demonstrating that no substitutable goods are produced domestically. The CEO is mandated to review applications and, if satisfied, to issue a written TCO (s 269K(1)). Additionally, the CEO must publish a notice in the Gazette inviting public submissions on the proposed TCO, although no submissions were received for TCO No. 0933116. The TCO comes into effect on the date the application is lodged, without retroactive effect on existing rights or liabilities (s 269S(1)).
Failure to comply with the provisions of the Customs Act 1901, including the submission of false information in a TCO application, may result in legal consequences. Although the explanatory statement does not explicitly outline specific offences or penalties, breaches of the Act generally attract penalties under the Customs Act itself, which can include fines and imprisonment. The precise penalties would depend on the nature and severity of the breach, as well as other applicable laws.
For TCO No. 0933116, which pertains to certain germination kiln parts, the general rate of duty is 5%, but under the TCO, the duty rate is free. Importers of these goods can apply for a refund of duty paid on imports since the TCO came into effect on 7 September 2009 (Reg 126(1)(r)). The TCO ensures that the rights of importers are beneficially affected without imposing new liabilities on any party.