EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1049284
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.
Manildra Group applied for a TCO in respect of certain parts for dried grain distillers and/or parts for dried grain distillers with a solubles dryer on 05 November 2010.
Instrument
TCO No 1049284 was made on 31 January 2011. It declares that those certain parts for dried grain distillers and/or parts for dried grain distillers with a solubles dryer 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. 1049284 is taken to have come into force on 05 November 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, was designed to regulate and facilitate the administration of customs duties and provide for the protection of revenue and the control of goods entering and leaving Australia. A notable feature of the Act is its provision for Tariff Concession Orders (TCOs), which were introduced to address the problem of ensuring that Australian industries remain competitive by providing tariff relief on specific goods that are not produced domestically. This scheme allows for lower customs duty rates on certain imported goods, provided they meet specific criteria. The policy objective behind TCOs is to support Australian industries by reducing the cost of imported goods that do not have local substitutes, thereby encouraging their use and integration into the Australian market. The process for making a TCO involves an application to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria before issuing the order. The enactment of TCO No. 1049284, effective from 5 November 2010, exemplifies this process, as it provided a tariff concession for certain parts for dried grain distillers, effectively setting the duty rate at zero.
Scope and Application
The Tariff Concession Instrument No. 1049284, made under the Customs Act 1901, applies specifically to certain parts for dried grain distillers and/or parts for dried grain distillers with a solubles dryer. This legislation provides for a tariff concession order (TCO) that reduces the rate of customs duty from the general rate of 5% to free for these specified goods. The instrument extends to the Commonwealth and is administered by the Chief Executive Officer of Customs, who must assess applications for TCOs against the core criteria outlined in the Act. These criteria include ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. The TCO is effective from the date the application was made, which in this case is 5 November 2010, and it does not retroactively affect any rights or impose liabilities on individuals or entities other than the Commonwealth. The instrument also allows for public consultation, although in this instance, no submissions were received in response to the published notice in the Gazette.
Key Provisions
The Customs Act 1901, through section 269F (1), permits an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO is satisfied that the application pertains to goods not excluded under section 269SJ, they must assess whether the application meets the core criteria outlined in section 269C. Specifically, this involves verifying that no substitutable goods, as defined in section 269D, were produced in Australia in the ordinary course of business on the day the application was lodged. If the application is deemed to meet these criteria, the CEO must issue a written TCO, as mandated by section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations imposed on the parties under this legislation include the requirement for applicants to submit a detailed application to the CEO, ensuring that the goods specified are not subject to exclusions outlined in section 269SJ. The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted. This process is detailed in subsection 269K(1). Additionally, the CEO is required to make a decision on the application based on the criteria set forth in section 269C and issue a written TCO if the application meets these criteria, as stipulated in section 269P(3).
In the event of a breach or non-compliance with the requirements set out in the Customs Act 1901 or the associated regulations, there are potential civil and criminal consequences. While the explanatory statement does not explicitly detail penalties for breaches, the Act and associated regulations provide for fines and imprisonment for serious or repeated breaches of customs laws. The specific penalties would be determined based on the nature and severity of the breach, as outlined in the relevant sections of the Customs Act 1901 and any applicable regulations. It is important for parties involved to adhere to the stipulated requirements to avoid any potential legal repercussions.