EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943793
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.
Joe White Maltings applied for a TCO in respect of certain barley grain separation machines on 19 November 2009.
Instrument
TCO No 0943793 was made on 5 February 2010. It declares that those certain barley grain separation machines 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. 0943793 is taken to have come into force on 19 November 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods, among other things, by imposing customs duty on imported goods. It provides a framework for the administration of customs and excise, including the authority for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to grant tariff concessions on certain imported goods. The Tariff Concession Instrument No. 0943793, issued under the Customs Act 1901, addresses the gap in providing tariff concessions for specific imported goods where no substitutable goods are produced in Australia, thereby facilitating trade and benefiting importers by reducing or eliminating customs duty on these goods. The policy objective is to ensure that such tariff concessions do not disadvantage any person other than the Commonwealth and do not impose any liabilities on persons in respect of actions taken prior to the TCO’s effective date.
Scope and Application
The Tariff Concession Instrument No. 0943793, made under the Customs Act 1901, applies to specific barley grain separation machines and pertains to the granting of tariff concessions by the Chief Executive Officer of Customs. This legislation facilitates the reduction of customs duty for certain imported goods, provided the applicant meets the core criteria outlined in the Act. The application process requires that the goods in question are not substitutable by any goods produced in Australia and must be lodged with the CEO, who then determines the eligibility of the application. In this particular case, Joe White Maltings successfully applied for tariff concessions on certain barley grain separation machines, resulting in a duty-free status for these goods, which previously carried a 5% duty rate. The geographic reach of this Act is national, given its foundation in Commonwealth legislation, and it impacts entities involved in the importation of these specific machines.
The Act's scope extends to any entity or person applying for tariff concessions on behalf of imported goods, ensuring that the concession does not affect the rights of any person other than the Commonwealth as at the date of registration. There are no exemptions or exclusions specified for this particular Instrument, and it does not impose any liabilities on persons other than the Commonwealth. The commencement of the Instrument aligns with the date of the application, which in this instance was 19 November 2009. The legislation does not require subordinate instruments to extend or restrict its application, as its provisions are sufficiently detailed within the primary Act.
Key Provisions
The main operative sections of this legislation include section 269C, which outlines the core criteria that an application for a Tariff Concession Order (TCO) must meet, and section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods (269F). A TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (269C). The CEO must then make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (269P(3)). Additionally, the CEO must publish a notice in the Gazette, inviting any person who believes the TCO should not be made to submit their reasons (269K(1)).
The Act imposes several obligations on the parties involved. Firstly, applicants for a TCO must ensure that their application meets the core criteria, which includes demonstrating that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (269C). The CEO is required to assess whether the application meets these criteria and, if satisfied, must make a TCO (269F, 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties (269K(1)). Importers, once a TCO is in effect, have the right to apply for a refund of duty on goods imported since the TCO came into force (126(1)(r) of the Regulations).
Failure to comply with the provisions of the Act can result in various consequences. While the explanatory statement does not specify detailed penalties, breaches of customs regulations generally can lead to civil and criminal penalties. For example, under the Customs Act 1901, penalties can include fines and imprisonment for serious breaches. In the context of TCOs, non-compliance with the application process or misrepresentation of facts can lead to the TCO being revoked or not granted in the first place. Additionally, any misrepresentation or fraudulent activities in the application process can result in criminal charges, with potential penalties including fines and imprisonment.