EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116285
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.
Queensland Machinery Agency applied for a TCO in respect of certain feed mixers on 24 May 2011.
Instrument
TCO No 1116285 was made on 08 August 2011. It declares that those certain feed mixers 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. 1116285 is taken to have come into force on 24 May 2011.
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. 1116285, enacted in 2011, is a measure introduced under the Customs Act 1901 to address the need for tariff concessions on specific goods. This instrument was established to facilitate the application process for Tariff Concession Orders (TCOs) by allowing the Chief Executive Officer of Customs to reduce or eliminate customs duty on certain goods, provided they meet specific criteria. The primary objective of this legislation, as stated in the explanatory statement, is to ensure that when the CEO is satisfied that a TCO application meets the core criteria, they must make a written order that reduces or eliminates customs duty on the specified goods. This was aimed at promoting economic efficiency by potentially lowering the costs for importers and enhancing competitiveness by allowing access to goods that are not domestically produced.
The instrument was enacted by the Australian Government and was introduced to provide a mechanism through which businesses could apply for tariff concessions, thereby potentially lowering their costs and improving their competitive position. The policy objective behind this legislation is to support businesses by ensuring that they have access to affordable imported goods, particularly when there are no substitutable goods produced domestically. This is achieved by providing a streamlined process for applying for and obtaining tariff concessions, which can be particularly beneficial for industries reliant on imported materials or equipment.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty to be applied to specified goods, provided the application meets the core criteria outlined in section 269C of the Act. This means that a TCO can only be granted if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The instrument applies to any person or entity that has applied for and been granted a TCO for goods that meet these criteria. The geographic reach of this legislation is national, as the Customs Act 1901 is a Commonwealth Act. It is important to note that the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, although no submissions were received for TCO No. 1116285. The instrument, once made, has retroactive effect from the date the application was lodged, in this case, 24 May 2011. However, the rights of persons other than the Commonwealth are not affected adversely by the TCO in respect of anything done or omitted before the date of registration, and the TCO does not impose any new liabilities on any person.
Key Provisions
The primary operative sections of this legislation (F2011L02463) include sections 269C, 269F, 269P(3), and 269S(1) of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application meets the core criteria, as outlined in section 269C, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). A TCO is deemed to come into force on the day the application was lodged (section 269S(1)).
The Act imposes specific obligations on the CEO when processing a TCO application. Firstly, the CEO must determine if the application is for goods that cannot be subject to a TCO, as specified in section 269SJ. If the goods are eligible, the CEO must assess whether the application meets the core criteria by ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If satisfied, the CEO must make a TCO as required by section 269P(3). Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)).
There are no explicit offences, penalties, or civil/criminal consequences mentioned in this legislation for breaching the requirements of a TCO. However, the Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration to disadvantage that person or impose liabilities on a person for anything done or omitted before the date of registration (subsection 269S(2)). This means that the rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person.