EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0934708
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.
Riverland Oilseeds applied for a TCO in respect of certain oilseeds conditioners on 16 September 2009.
Instrument
TCO No 0934708 was made on 27 November 2009. It declares that those certain oilseeds conditioners 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. 0934708 is taken to have come into force on 16 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 a scheme under which Tariff Concession Orders (TCOs) may be made to provide a lower rate of customs duty on certain goods. The Tariff Concession Instrument No. 0934708, made in 2009, is an example of such an order, declaring that specific oilseeds conditioners are subject to a zero rate of duty rather than the general 5% duty. This was made possible because the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia at the time of the application, meeting the core criteria set out in the Act. The policy objective of such concessions is to potentially benefit importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, without imposing any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0934708 under the Customs Act 1901 applies specifically to goods for which a Tariff Concession Order (TCO) has been applied and subsequently granted by the Chief Executive Officer of Customs. This legislation allows for the reduction of customs duty on particular goods, provided that the application for a TCO meets the core criteria set out in section 269C of the Act. This includes the condition that no substitutable goods were produced in Australia on the day the application was lodged, as defined in section 269D and 269E of the Act. The geographic scope of the Act is national, given its Commonwealth jurisdiction, and it impacts importers who are entitled to apply for refunds on duty paid for the specified goods since the TCO came into force on the date of the application. However, the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. The legislation ensures that the application of the TCO does not disadvantage any person or impose liabilities in respect of anything done or omitted before the date of registration.
Key Provisions
The main operative sections of this legislation (section 269C, section 269P(3)) require the Chief Executive Officer of Customs (CEO) to consider whether an application for a Tariff Concession Order (TCO) meets the core criteria, which include whether no substitutable goods are produced in Australia on the day the application was lodged. If these criteria are met, the CEO must make a written order declaring the goods to which the TCO applies. This particular TCO, made under section 269P(3), applies to certain oilseed conditioners, and it specifies that these goods will be subject to a free rate of duty instead of the general rate of 5%.
The obligations and requirements imposed by this Act on the parties it governs include the necessity for an applicant to ensure that their application for a TCO is made in good faith and meets the statutory criteria. The CEO must also act promptly in processing the application, which involves publishing a notice in the Gazette (section 269K(1)) to allow for any objections from interested parties. In this case, no submissions were received, indicating that the CEO proceeded to grant the TCO based on the provided information and the absence of objections.
Breach of the provisions of this Act can lead to civil or criminal consequences, though the specific offences, penalties, or consequences are not detailed in this explanatory statement. The general implication is that failure to comply with the requirements for a TCO could result in the denial of tariff concessions, potentially exposing the applicant to the standard duty rates applicable to the goods in question. It is worth noting that the Act is designed to ensure that the tariff concessions are granted fairly and only when the specified criteria are met, thus maintaining the integrity of the tariff system.
The Tariff Concession Order No. 0934708, which was made on 27 November 2009, and is effective from 16 September 2009, clearly outlines the circumstances under which certain oilseed conditioners will benefit from a zero rate of duty. This legislative instrument ensures that the rights of importers are protected and that they can apply for duty refunds on goods imported since the TCO came into force. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth, safeguarding the interests of all other stakeholders involved.