EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1048084
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.
Waratah Thoroughbreds Pty Ltd applied for a TCO in respect of certain horse walker track, ramp and tank systems on 27 October 2010.
Instrument
TCO No 1048084 was made on 17 January 2011. It declares that those certain horse walker track, ramp and tank systems 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. 1048084 is taken to have come into force on 27 October 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 under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative instrument addresses the need to provide tariff concessions on certain goods, facilitating trade and economic benefits by lowering customs duty rates for specified items. The Tariff Concession Instrument No. 1048084, made under this Act on 17 January 2011, exemplifies the application of this framework. In this instance, Waratah Thoroughbreds Pty Ltd applied for a TCO concerning specific horse walker track, ramp, and tank systems, resulting in a tariff concession that reduced the duty rate from 5% to free. The policy objective, as stated in the explanatory statement, is to ensure that the TCO does not adversely affect the rights of any person, except the Commonwealth, and to provide a benefit to importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force on 27 October 2010.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, applies to entities or individuals who seek to import goods that may benefit from reduced customs duty rates. This Act provides a mechanism by which the Chief Executive Officer of Customs can make orders that lower the customs duty on certain goods, provided specific criteria are met. The Act applies to a wide range of industries and goods, as long as they do not fall under the list of goods specified in section 269SJ of the Act that cannot be subject to a TCO. The instrument in question, TCO No 1048084, pertains to certain horse walker track, ramp, and tank systems, for which a tariff concession was granted following an application by Waratah Thoroughbreds Pty Ltd. The geographic reach of this Act is national, as it is a Commonwealth Act. However, the Act may be extended or restricted through subordinate instruments, which can provide further detail or modify its application in specific contexts. The TCO in question came into force on the date of the application, 27 October 2010, and does not disadvantage or impose liabilities on any person in respect of actions taken prior to its registration.
Key Provisions
The main operative sections of this legislation revolve around the making of Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901. The Chief Executive Officer of Customs (CEO) has the authority to make these orders, which provide for lower rates of customs duty on specific goods, provided certain criteria are met. Specifically, section 269C states that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269D and 269E, which explain what is meant by "goods produced in Australia" and "ordinary course of business," respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order under section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
The obligations and requirements imposed by the Act on the parties or entities it governs are primarily centred on the CEO’s duty to assess applications for TCOs and make written orders where appropriate. This involves verifying that the goods in question are not substitutable by Australian-produced goods and ensuring that any submissions from the public regarding the proposed TCO are considered. Once an application is accepted as valid, the CEO must also publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In this instance, no submissions were received in response to the notice, as outlined in subsection 269K(1) of the Act. The TCO itself does not affect the rights of any person other than the Commonwealth, ensuring that no individual is disadvantaged or subjected to new liabilities as a result of its implementation.
Regarding consequences for breach, the Customs Act 1901 does not explicitly detail specific offences, penalties, or civil/criminal consequences for non-compliance with the provisions related to TCOs. However, the general principles of administrative law and the inherent authority of the CEO to enforce the Act would apply if any party were to breach the terms of the TCO or otherwise act in a manner contrary to the Act's requirements. This could potentially involve legal action or other administrative measures to rectify non-compliance. The Act’s focus is more on the procedural correctness and fairness of the TCO process rather than prescribing specific penalties for individual breaches.