EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0412188
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.
The Colla Trust applied for a TCO in respect of certain egg conveyors on 12 November 2004.
Instrument
TCO No 0412188 was made on 1 February 2005. It declares that those certain egg conveyors 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 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. 0412188 is taken to have come into force on 12 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 was enacted by the Australian Parliament to provide for the regulation of imports and exports, including the imposition of customs duties on goods entering the country. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for the reduction of customs duty on certain goods under specific conditions. Instrument TCO No. 0412188 was introduced to address the Colla Trust's application for a TCO on certain egg conveyors, effective from 12 November 2004. The policy objective was to provide tariff relief where appropriate, ensuring that Australian importers do not face undue financial burdens and are able to compete effectively in the market, while also ensuring that the decision-making process is transparent and open to public consultation. The CEO of Customs was satisfied that the application met the core criteria, and the TCO was published in the Gazette with no objections received.
Scope and Application
The Tariff Concession Instrument No. 0412188, made under the Customs Act 1901, applies to any person or entity seeking a tariff concession order (TCO) for specific goods imported into Australia. This particular instrument concerns the Colla Trust's application for a TCO for certain egg conveyors, which was approved by the Chief Executive Officer of Customs (CEO). The approval was based on the CEO's satisfaction that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The instrument declares that the egg conveyors in question are subject to a lower rate of customs duty, specifically 3%, as opposed to the general rate of 5%. The instrument's application is effective from the date the application was lodged, 12 November 2004, and it does not affect the rights of any person adversely or impose any liabilities in respect of actions taken before the date of registration. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties, though no submissions were received in response to this particular application. The scope of the Act is further extended through subordinate instruments which can modify or clarify the application of the primary legislation.
Key Provisions
The Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Specifically, Section 269F allows any person to apply to the CEO for a TCO concerning particular goods, which would then be subject to a lower rate of customs duty. For an application to be considered, it must not pertain to goods specified in Section 269SJ, which outlines goods that cannot be subject to a TCO. If the CEO determines that the application does not fall under these restricted goods, they must assess whether the application meets the core criteria as per Section 269C. This criterion is met if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The CEO is mandated by Section 269P(3) to issue a written order if satisfied that the application meets the core criteria. This order declares that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, with a reduced rate of duty. For example, Instrument TCO No 0412188, made on 1 February 2005, declared certain egg conveyors as goods subject to a 3% duty rate, down from the general rate of 5%, because no substitutable goods were produced in Australia.
The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to submit their reasons. This is required by Subsection 269K(1) of the Act. In the case of TCO No 0412188, no submissions were received in response to this invitation.
In terms of the obligations and requirements imposed by the Act, the CEO must ensure that the application is not for goods specified in Section 269SJ and must verify the absence of substitutable goods produced in Australia on the application date. If these conditions are met, the CEO must make a TCO. Additionally, once a TCO is made, it is taken to have come into force on the date the application was lodged, as stated in Subsection 269S(1). This ensures that any rights of importers are beneficially affected from that date. Importantly, the TCO does not disadvantage any person (other than the Commonwealth) or impose any liabilities in respect of actions taken before the TCO’s effective date.
Regarding penalties and consequences, the Act does not specify criminal or civil penalties for breaches of the TCO provisions. However, the Act ensures that the TCO does not impose any liabilities on any person, protecting them from any retrospective liabilities. Importers can benefit from applying for a refund of duty on goods imported since the TCO’s effective date, as per paragraph 126(1)(r) of the Regulations.