EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936044
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.
Manildra Milling Group applied for a TCO in respect of certain gluten disintegrator parts on 24 September 2009.
Instrument
TCO No 0936044 was made on 04 December 2009. It declares that those certain gluten disintegrator 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. 0936044 is taken to have come into force on 24 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 Tariff Concession Instrument No. 0936044 was enacted in 2009 under the Customs Act 1901, with the primary objective of facilitating tariff concessions for specific goods that meet certain criteria. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to eligible goods. This instrument was introduced to address the problem of ensuring that businesses have access to competitively priced imported goods that do not have Australian-made alternatives. The process involves an application to the CEO, who must determine whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia. In this instance, the CEO was satisfied that the application for gluten disintegrator parts met these criteria, resulting in a tariff concession that reduces the duty on these goods from 5% to free. This legislative measure aims to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the TCO's effective date, without imposing any new liabilities.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty on specified goods. The Act applies to any individual or entity that seeks to reduce the customs duty on imported goods through a TCO application. To qualify for a TCO, the goods must not be substitutable by any produced in Australia and must meet specific criteria regarding production and use as outlined in the Act. This legislation extends across the Commonwealth of Australia and applies to all entities involved in the import of the specified goods. Notably, the Act does not apply to goods listed in section 269SJ, which details those items ineligible for tariff concessions. The application and enforcement of TCOs can be further defined or expanded through subordinate instruments, ensuring flexibility and precision in their administration.
Key Provisions
The Tariff Concession Instrument No. 0936044 under the Customs Act 1901 primarily focuses on the application and implementation of Tariff Concession Orders (TCOs). Section 269F (1) of the Act enables a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods, provided the goods are not listed in section 269SJ as those that cannot be subject to a TCO. The CEO is mandated to assess whether the application meets the core criteria outlined in section 269C, which requires that, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) stipulates that if the CEO is satisfied that the application meets these criteria, they must issue a written TCO.
The obligations under this Act for the parties involved include the requirement for the applicant to ensure that the goods specified in their TCO application meet the criteria set out in sections 269C and 269SJ. The CEO must rigorously assess the application and verify that no substitutable goods are produced in Australia, as defined by sections 269D, 269E, and 269F. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1) inviting submissions from any person who believes the TCO should not be made. In the case of TCO No. 0936044, the CEO did not receive any submissions, indicating a consensus or lack of opposition to the TCO.
Any breaches of the provisions under this Act could lead to significant consequences. For instance, if a person knowingly provides false information in their application for a TCO, they could face criminal penalties. The Act does not specify the exact penalties but refers to general provisions under the Customs Act 1901 which may include fines and imprisonment. Furthermore, if the CEO fails to comply with the statutory requirements for issuing or refusing a TCO, they could be subject to administrative law remedies, including judicial review, which could result in the quashing of the TCO or the imposition of corrective measures. The Act also ensures that the TCO does not adversely affect the rights of any person as at the date of registration and does not impose any new liabilities on persons other than the Commonwealth.