EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1055469
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.
CSL Limited applied for a TCO in respect of certain candling and egg sorting machines on 20 December 2010.
Instrument
TCO No 1055469 was made on 16 March 2011. It declares that those certain candling and egg sorting 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. 1055469 is taken to have come into force on 20 December 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 Tariff Concession Instrument No. 1055469 was enacted in 2011 under the Customs Act 1901 to address the issue of imposing a lower rate of customs duty on certain goods for which a Tariff Concession Order (TCO) has been applied. The Act was enacted by the Parliament of Australia to provide a mechanism for granting tariff concessions on goods, thereby encouraging trade and reducing costs for importers. The explanatory statement outlines that the CEO of Customs must decide whether an application for a TCO meets the core criteria, which includes ensuring that no substitutable goods were produced in Australia on the day the application was lodged. In this instance, TCO No. 1055469 was issued for certain candling and egg sorting machines after CSL Limited applied for the concession, resulting in a free rate of duty on these goods, down from the general rate of 5%. The instrument was effective from the date the application was lodged, and no submissions were received in opposition to the concession.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods that are subject to a lower rate of customs duty. The application process for a TCO requires an applicant to demonstrate that the goods in question do not have substitutable goods produced in Australia in the ordinary course of business, as outlined in section 269C of the Act. Once the CEO is satisfied that an application meets the core criteria and no submissions are received against the application, a TCO is made, which is effective from the date the application was lodged. For example, TCO No. 1055469, made on 16 March 2011, applies to certain candling and egg sorting machines, reducing the duty rate from 5% to free. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities, while benefiting importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. The Act's application is extended through subordinate instruments such as the Customs Tariff Act 1995.
Key Provisions
The main operative sections of this legislation are sections 269F, 269C, and 269P(3) of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). Section 269C sets out the core criteria that a TCO application must meet, which is that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to 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. In this case, TCO No 1055469 was made on 16 March 2011, declaring that certain candling and egg sorting machines are goods to which item 50 of Schedule 4 to the Tariff applies.
The Act imposes several obligations and requirements on the parties or entities it governs. Under section 269K(1), 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. In this case, the CEO did not receive any submissions in response to this invitation. Additionally, under section 269S(1), a TCO is taken to have come into force on the day on which the application for the TCO was lodged. 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.
There are no offences, penalties, or civil/criminal consequences for breach mentioned in the text. However, it is important to note that the TCO does not impose any liabilities on any person. If a person believes that the TCO should not have been made, they may have had the opportunity to lodge a submission with the CEO under section 269K(1) of the Act. If the CEO had received any submissions in response to the invitation to lodge a submission, the CEO would have had to consider them before making the TCO. In this case, the CEO did not receive any submissions in response to the invitation.