EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946227
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.
Bradken Resources applied for a TCO in respect of certain sand mould dryers on 06 January 2009.
Instrument
TCO No 0946227 was made on 27 March 2009. It declares that those certain sand mould dryers 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. 0946227 is taken to have come into force on 06 January 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 Australian Parliament, facilitates the application of lower customs duty rates to specific goods through Tariff Concession Orders (TCOs). This legislative framework was introduced to address the need for flexible tariff arrangements that accommodate the unique circumstances of certain goods, ensuring they are not subject to prohibitive duties if no suitable Australian-produced alternatives exist. The Tariff Concession Instrument No. 0946227, issued in 2009, exemplifies this process. In this instance, Bradken Resources successfully applied for a TCO concerning certain sand mould dryers, resulting in a reduction of the customs duty rate from 5% to free. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, satisfying the core criteria for the concession. The policy objective of this instrument is to encourage the importation of goods where there are no domestic alternatives, thereby supporting industry competitiveness and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0946227 applies to specific sand mould dryers and is governed under Part XVA of the Customs Act 1901. The Act allows for the application of lower rates of customs duty on goods that are the subject of a Tariff Concession Order (TCO), which is issued by the Chief Executive Officer of Customs (CEO) upon meeting certain criteria. The Act applies to any person or entity that imports the specified sand mould dryers into Australia, provided no substitutable goods are produced in Australia. The geographic reach of this Act is national, as it pertains to customs duties across the Commonwealth of Australia. The Act does not impose any liabilities on individuals or entities, except for the Commonwealth, and does not disadvantage any person in respect of actions taken before the TCO's registration date. The application of this Act may be extended or restricted through subordinate instruments, such as regulations, which may further define the scope of the concession or establish additional conditions for its application.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0946227 under the Customs Act 1901 (section 269C) require that a Tariff Concession Order (TCO) may be made by the Chief Executive Officer of Customs (CEO) if the application for the TCO meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)). The instrument declares that certain sand mould dryers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with a rate of duty that is free, instead of the general rate of 5% (section 269S(1)).
The obligations and requirements imposed by the Act on the parties or entities it governs include the necessity for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). The CEO must also ensure that the application meets the core criteria before making a TCO. In this case, as the CEO did not receive any submissions in response to the notice, the TCO was made without opposition.
Under the Act, any breach of the conditions set out in a TCO can lead to civil or criminal consequences. Although the explanatory statement does not detail specific offences or penalties for breaching the terms of a TCO, it is reasonable to infer that penalties could apply similarly to those under the Customs Act 1901, which include fines and imprisonment. The exact penalties would depend on the nature and severity of the breach, as outlined in the relevant sections of the Customs Act.
The Tariff Concession Instrument No. 0946227 does not affect the rights of a person, other than the Commonwealth, as at the date of registration in a way that would disadvantage that person or impose liabilities for actions taken before the date of registration. Importers will benefit from this TCO by being able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any liabilities on any person.