EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0947675
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 destoners and separators on 07 December 2009.
Instrument
TCO No 0947675 was made on 26 February 2010. It declares that those certain destoners and separators 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. 0947675 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 Tariff Concession Instrument No. 0947675, issued in 2010, amends the Customs Act 1901 by introducing a tariff concession order that provides a reduced rate of customs duty for specific goods, namely certain destoners and separators. This instrument addresses a gap in the tariff system by ensuring that no substitutable goods are produced in Australia at the time of the application, thereby allowing the concession. Enacted by the Chief Executive Officer of Customs, the instrument aims to provide relief to importers by lowering the duty from the general rate of 5% to free, without imposing any liabilities on third parties. The Tariff Concession Order No. 0947675 was made effective from 7 December 2009, the date of the application, and does not disadvantage any person or impose new liabilities. The process involved publishing a notice in the Gazette to allow for objections, though none were received.
Scope and Application
The Tariff Concession Instrument No. 0947675 under the Customs Act 1901 pertains to the application of Tariff Concession Orders (TCOs) for specific goods, namely certain destoners and separators. This legislation applies to Barrett Burston Malting Co Ltd, the entity that applied for the concession, as well as to importers of these specified goods. The Act facilitates a reduction in customs duty for these goods by declaring that no substitutable goods are produced in Australia, thereby meeting the core criteria stipulated in the Act. The geographic reach of this Act is national, as it applies across Australia, governed by the Commonwealth. There are no exclusions or exemptions specified within the explanatory statement, and the application of the Act does not extend or restrict through subordinate instruments, as it stands within the parameters of the Customs Act 1901. The implementation of the TCO does not affect the rights of any person adversely and does not impose any liabilities on any person.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0947675, under the Customs Act 1901, relate to the process and criteria for making Tariff Concession Orders (TCOs) and the subsequent application of reduced customs duty rates to specified goods (sections 269C, 269F, 269P(3)). Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, they are required to make a written order (section 269P(3)). For this instrument, the CEO was satisfied that the application from Barrett Burston Malting Co Ltd for certain destoners and separators met the core criteria, which was that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Consequently, TCO No. 0947675 was issued, declaring that these goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO must determine whether the application meets the core criteria by confirming that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. For this specific case, the CEO was required to publish a notice in the Gazette inviting submissions on the proposed TCO, although no submissions were received. The Act also stipulates that a TCO comes into force on the day the application is lodged (subsection 269S(1)), meaning TCO No. 0947675 is effective from 07 December 2009.
Failure to comply with the provisions of the Customs Act 1901 can lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences under this particular TCO, breaches of the Customs Act more generally can result in penalties. For example, section 239A of the Customs Act imposes penalties for making a false or misleading statement in relation to an application for a TCO, with potential fines up to $22,200 or imprisonment for up to two years, or both. Furthermore, section 147 of the Crimes Act 1914 applies to offences under the Customs Act, where the maximum penalty can be substantial, reflecting the seriousness of the breach. The Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, thereby safeguarding against any disadvantage or liability for actions taken prior to the registration date.