EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008947
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 applied for a TCO in respect of certain malt germinator and or kiln parts on 18 February 2010.
Instrument
TCO No 1008947 was made on 14 May 2010. It declares that those certain malt germinator and or kiln parts 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. 1008947 is taken to have come into force on 18 February 2010.
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 Parliament of Australia, establishes a framework for the regulation of customs and excise duties. This framework includes the ability to create Tariff Concession Orders (TCOs) under Part XVA, which allow for the reduction or exemption of customs duties on specific goods. The intent behind these concessions is to facilitate trade by lowering the cost of importing certain goods, provided that no substitutable goods are produced in Australia and the application meets other core criteria. Tariff Concession Instrument No. 1008947 was introduced to address the specific need of Barrett Burston Malting Co for a tariff concession on certain malt germinator and kiln parts, which would otherwise be subject to a general duty rate of 5%. The instrument was made effective from the date the application was lodged, 18 February 2010, and the concession resulted in the duty on these goods being set to free, thereby easing the financial burden on importers of these items.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can reduce the rate of customs duty on certain goods, as applied to those specified in a TCO. The application process for a TCO is initiated by an individual or entity seeking to have certain goods subjected to a lower duty rate, provided that these goods do not fall under the exclusions outlined in section 269SJ of the Act. The CEO must assess the application against the core criteria, particularly ensuring that no substitutable goods are produced in Australia at the time of application, as defined by sections 269C, 269D, 269E, and 269F. Once the application meets these criteria, the CEO is mandated to issue a TCO. This legislative framework applies nationally across Australia, impacting entities and individuals involved in the importation of the specified goods. The scope of this Act extends to all persons and entities involved in the importation process, and it encompasses the entire nation. The Act does not explicitly state any exclusions or exemptions, but it does allow for the possibility of subordinate instruments to further define or refine the application of TCOs.
Key Provisions
The Customs Act 1901 (the Act) provides a framework under which Tariff Concession Orders (TCOs) can be made, as outlined in Part XVA of the Act (section 269F). A TCO application can be submitted by any person to the Chief Executive Officer of Customs (the CEO) for goods that are not specified in section 269SJ of the Act (section 269F). If the CEO determines that the application meets the core criteria, they must make a written order (a TCO) specifying the reduced duty for the goods in question (subsection 269P(3)). For instance, in TCO No 1008947, certain malt germinator and kiln parts were declared to be subject to a 5% duty rate, down from the general rate, effective from the date the application was lodged, 18 February 2010 (subsection 269S(1)).
The obligations imposed on parties by this Act include the requirement for the CEO to assess whether a TCO application meets the core criteria (section 269C). This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO (subsection 269K(1)). Importantly, this process ensures transparency and provides an opportunity for stakeholders to voice any concerns before a TCO is finalised.
Failure to comply with the provisions of the Act can lead to civil and criminal consequences. Under section 269W, any person who knowingly makes a false or misleading statement in an application for a TCO can be subject to a penalty. The maximum penalty for an individual is 120 penalty units or imprisonment for one year, or both, while for a body corporate, the penalty can be significantly higher at 600 penalty units or five times the value of the benefit obtained, whichever is greater (subsection 269W(2)). These stringent penalties underscore the importance of accuracy and honesty in TCO applications, thereby maintaining the integrity of the tariff concession scheme.