EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940167
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.
Melbourne Precast Concrete applied for a TCO in respect of certain concrete mixing and batching plant on 23 October 2009.
Instrument
TCO No 0940167 was made on 08 January 2010. It declares that those certain concrete mixing and batching plant 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. 0940167 is taken to have come into force on 23 October 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 and excise duties in Australia. The Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs to provide tariff concessions on certain goods. This legislative instrument was introduced to address the need for a streamlined process for businesses to apply for tariff reductions on goods that are not produced domestically or are not readily substitutable with locally produced goods. The policy objective is to support industries by reducing the cost of imported goods, thereby enhancing competitiveness and potentially lowering consumer prices. Melbourne Precast Concrete’s application for a tariff concession on concrete mixing and batching plant exemplifies how the scheme operates, ensuring that these specific goods benefit from a reduced customs duty rate of free, as opposed to the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 0940167, which amends the Customs Act 1901, applies to the specific goods—concrete mixing and batching plant—as identified by Melbourne Precast Concrete. This instrument is concerned with reducing the rate of customs duty applicable to these goods by granting a Tariff Concession Order (TCO) under section 269F of the Act. The concession is contingent upon the Chief Executive Officer (CEO) of Customs determining that no substitutable goods are produced in Australia, aligning with the criteria specified in section 269C. The instrument thus applies to the goods specified in the application, ensuring they are not of the types listed in section 269SJ which are ineligible for TCOs. Jurisdictionally, the Act operates under the Commonwealth of Australia, extending its reach across the entire nation. The TCO does not affect any existing rights or impose liabilities on persons other than the Commonwealth, as stipulated under the Act. Additionally, the rights of importers are positively impacted, allowing them to apply for duty refunds for goods imported since the TCO's effective date, as per the Customs Tariff Act 1995.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0940167, under the Customs Act 1901, revolve around the establishment and application of Tariff Concession Orders (TCOs). Section 269F enables a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the application does not involve goods listed in section 269SJ, which are ineligible for TCOs, the CEO evaluates whether the application meets the core criteria outlined in section 269C. For an application to meet these criteria, it must be demonstrated that, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. Once the CEO determines that an application meets these criteria, they must issue a written TCO as stipulated in subsection 269P(3).
The Act imposes several obligations on the parties involved in the TCO process. Applicants, such as Melbourne Precast Concrete in this instance, must ensure their applications are valid and meet the core criteria as defined by the Act. The CEO is required to assess the application's validity and determine whether it meets the core criteria. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. This requirement is outlined in subsection 269K(1). Once the CEO accepts the application and determines it meets the criteria, they are mandated to issue the TCO, which declares that the specified goods are subject to a lower rate of duty as per the Customs Tariff Act 1995.
Breach of the obligations set out in the Act may lead to various consequences. While the explanatory statement does not explicitly detail offences or penalties, it is reasonable to infer that non-compliance with the Act’s provisions could result in legal repercussions. For instance, if an applicant provides misleading information or the CEO fails to follow the statutory requirements, this could potentially lead to civil or criminal penalties. The severity of these penalties would depend on the nature and extent of the breach, but they could include fines or other legal sanctions as prescribed by relevant laws. Furthermore, the Act ensures that the rights of third parties are not adversely affected by the TCO, and it does not impose any liabilities on individuals or entities other than the Commonwealth.
The explanatory statement highlights that the TCO comes into force on the day the application is lodged, as per subsection 269S(1). This means that for TCO No. 0940167, the concessional tariff rate applied retroactively from 23 October 2009. The TCO benefits importers by allowing them to apply for duty refunds on goods imported since the effective date of the TCO. However, it does not affect the rights of any person as at the date of registration, ensuring that no one is disadvantaged or incurs new liabilities for actions taken before the TCO was issued.