EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1017985
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.
Ravensdown Fertiliser Co-op Ltd applied for a TCO in respect of certain fertiliser bagging machines on 20 April 2010.
Instrument
TCO No 1017985 was made on 09 July 2010. It declares that those certain fertiliser bagging 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. 1017985 is taken to have come into force on 20 April 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 Australian Parliament, establishes the framework for the administration of customs and excise duties in Australia. The Act was amended to include the scheme for Tariff Concession Orders (TCOs) under Part XVA, introduced to address the need for lowering customs duties on certain imported goods that do not have Australian-made substitutes. This legislative amendment aims to promote economic efficiency by ensuring that Australian industries do not face unfair competition from domestically produced goods, while also allowing for the import of goods that cannot be produced in Australia, thus supporting the broader policy objective of facilitating trade and economic development.
In the case of Tariff Concession Instrument No. 1017985, the Chief Executive Officer of Customs granted a TCO to Ravensdown Fertiliser Co-op Ltd for certain fertiliser bagging machines, effective from 20 April 2010. The TCO was issued after the CEO determined that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Customs Act. This instrument effectively reduces the customs duty on the specified fertiliser bagging machines from the general rate of 5% to free, aligning with the policy objective of supporting industries that require the importation of specific goods due to the absence of domestic production.
Scope and Application
The Customs Act 1901, as amended, facilitates the granting of Tariff Concession Orders (TCO) through which lower rates of customs duty can be applied to certain goods. Specifically, under Part XVA of the Act, the Chief Executive Officer of Customs (CEO) has the authority to make these orders, provided that the application meets the core criteria stipulated in section 269C of the Act, which requires that no substitutable goods are produced in Australia at the time the application is lodged. The application process mandates that once a valid application is accepted, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on why the TCO should not proceed, although no such submissions were received for TCO No. 1017985. The TCO applies to the specific fertiliser bagging machines for which Ravensdown Fertiliser Co-op Ltd applied, and the concession reduces the duty from the general rate of 5% to free, effective from the date the application was lodged, 20 April 2010. The TCO ensures that it does not adversely affect any pre-existing rights of non-Commonwealth persons nor impose liabilities on them for actions taken prior to the order's registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1017985 include section 269C (269C) of the Customs Act 1901, which outlines the core criteria that must be satisfied for an application to receive a Tariff Concession Order (TCO). This includes the requirement that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (269C). Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995 (269P(3)). In this case, the TCO No. 1017985 specifies that certain fertiliser bagging machines are subject to a duty rate of free, rather than the general rate of 5% (Schedule 4, item 50).
The Act imposes several obligations on the parties involved. The CEO of Customs must ensure that the application for a TCO meets the core criteria and, if satisfied, must issue a TCO (269C, 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (269K(1)). In this instance, no submissions were received in response to the published notice. The TCO itself does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken prior to the date of registration (269S(1)).
The Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches of the provisions within the Tariff Concession Instrument No. 1017985. However, the general framework under which the Customs Act operates includes provisions for penalties in the event of non-compliance with customs regulations. For example, section 204 of the Customs Act outlines various offences related to customs and excise matters, with associated penalties that can include fines and imprisonment. Although the specific penalties for breaches of a TCO are not detailed in the explanatory statement, it is understood that any breach of the Customs Act could result in penalties as prescribed within the broader context of the Act.