EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0947674
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.
Barrett Burston Malting Co. Ltd applied for a TCO in respect of certain malt barley separation machines on 07 December 2009.
Instrument
TCO No 0947674 was made on 26 February 2010. It declares that those certain malt barley 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. 0947674 is taken to have come into force on 07 December 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 to establish a framework for the administration of customs duties and other charges, with the aim of facilitating international trade while protecting domestic industries. In this context, Tariff Concession Orders (TCOs) were introduced to provide relief from customs duties for certain goods that are not produced domestically. The Tariff Concession Instrument No. 0947674 was enacted by the Chief Executive Officer of Customs in response to an application by Barrett Burston Malting Co. Ltd for a TCO in respect of malt barley separation machines. The instrument was made on 26 February 2010 and declared that these specific machines are exempt from customs duty, effective from the date the application was lodged on 7 December 2009. This exemption aims to support the importation of these machines by reducing the duty from the general rate of 5% to free, thereby encouraging the use of such machinery in the Australian market. The policy objective is to foster economic efficiency and support industries where domestic production does not meet demand or is not feasible.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0947674, applies to individuals or entities seeking tariff concessions on specific goods entering Australia. This legislation is concerned with the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act applies to any person who wishes to apply for a TCO on goods not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The scope of this Act is geographically limited to Australia, and it operates under the Commonwealth jurisdiction. The Act provides for the reduction or exemption of customs duty on goods specified in a TCO, subject to the condition that no substitutable goods are produced in Australia in the ordinary course of business. This condition is defined in sections 269C, 269D, 269E, and 269F of the Act. Additionally, the Act allows for the CEO to make subordinate instruments to extend or restrict the application of the TCO as necessary. In this specific case, the TCO No. 0947674 applies to certain malt barley separation machines, granting them a free rate of duty instead of the general rate of 5%.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0947674, include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, the CEO must make a TCO, declaring that the goods are subject to a prescribed rate of duty, as per section 269P. Section 269S specifies that a TCO comes into force on the day the application is lodged.
The Act imposes several obligations on the parties involved. Firstly, the CEO must determine if an application for a TCO meets the core criteria. This involves verifying that no substitutable goods are produced in Australia, as defined by sections 269D and 269E. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO, in accordance with section 269K(1). Failure to adhere to these obligations may result in the TCO not being granted or being challenged in court.
Failure to comply with the provisions of the Act can result in various consequences. Firstly, if the CEO does not properly assess whether the application meets the core criteria, the TCO may not be granted. Secondly, if a TCO is issued without proper consideration of the application, it may be subject to legal challenge. While the Act does not specify maximum penalties for breaches, breaches of the Customs Act can lead to civil or criminal penalties, including fines and imprisonment, under other sections of the Act.