EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411499
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.
Cadbury Schweppes Pty Ltd applied for a TCO in respect of certain caramel and chocolate paste co-extruders on 3 November 2004.
Instrument
TCO No 0411499 was made on 14 January 2005. It declares that certain caramel and chocolate paste co-extruders 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 3%.
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 initiation.
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. 0411499 is taken to have come into force on 3 November 2004>.
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 Commonwealth Parliament, establishes a framework for the imposition of customs duties on imported goods. One of its provisions, Part XVA, facilitates the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can reduce the rate of customs duty for specific goods. This legislative instrument was designed to address the problem of ensuring fair and competitive access to imported goods by allowing for tariff reductions when certain conditions are met. In line with section 269F of the Act, Cadbury Schweppes Pty Ltd applied for a TCO concerning certain caramel and chocolate paste co-extruders, and after satisfying the core criteria outlined in sections 269C and 269P(3), the CEO issued TCO No. 0411499 on 14 January 2005. The policy objective underpinning this action was to facilitate smoother trade by reducing the duty on these goods from the general rate of 5% to 3%. The TCO was effective from the date of the application, 3 November 2004, and did not impose any new liabilities on persons other than the Commonwealth, thereby protecting the rights of importers and potentially benefiting them through duty refund applications.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on specified goods. This scheme is applicable to any person or entity that wishes to apply for such a concession in respect of goods that are not specified as ineligible in section 269SJ of the Act. The application process requires that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as per section 269C. Upon meeting these core criteria, the CEO is mandated to issue a written TCO, which was the case with Cadbury Schweppes Pty Ltd’s application for certain caramel and chocolate paste co-extruders, leading to TCO No 0411499. This instrument applies nationally and effectively reduces the duty rate for these specific goods from 5% to 3%. Importantly, the TCO does not affect the rights of any person prior to its registration, ensuring that no liabilities are imposed retroactively. The TCO came into force on the date the application was lodged, 3 November 2004, with the rights of importers being beneficially affected as they can apply for duty refunds for imports since that date.
Key Provisions
The Customs Act 1901, under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269C and 269P). Section 269F of the Act permits an application for a TCO in respect of specific goods. If the CEO is satisfied that the application is valid and the goods do not fall under the exclusions listed in section 269SJ, the CEO must assess if the application meets the core criteria outlined in section 269C. This core criterion requires that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act.
The obligations imposed by the Customs Act 1901 on the CEO include verifying the validity of the TCO application and ensuring it meets the core criteria (section 269C). If the application meets these criteria, the CEO is required to issue a written order, a TCO, specifying the lower rate of duty that applies to the goods in question (subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO (subsection 269K(1)). This transparency ensures that all relevant stakeholders have the opportunity to voice their concerns before the TCO is finalised.
In terms of penalties and consequences, the Act does not explicitly state specific penalties for breaches related to TCOs. However, non-compliance with the Act or regulations could potentially lead to legal actions or administrative penalties as per the general provisions of the Customs Act 1901. For instance, if an entity falsely claims eligibility for a TCO, they might face civil or criminal liability under the general enforcement mechanisms provided by the Act, including fines and imprisonment for more severe violations.
The Tariff Concession Order No. 0411499, which came into force on 3 November 2004, applies to certain caramel and chocolate paste co-extruders, reducing the duty from 5% to 3%. This order does not retroactively affect the rights of any person except the Commonwealth and does not impose any liabilities on any person for actions taken before the date of registration (subsection 269S(1)). Importers of the affected goods can apply for a refund of the duty paid on those goods since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. This provision ensures that the benefits of the reduced duty are passed on to the importers without retroactive penalties.