EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413699
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.
Mcdonalds Australia Ltd applied for a TCO in respect of certain meat steamers on 16 December 2004.
Instrument
TCO No 0413699 was made on 21 February 2005. It declares that those certain meat steamers 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. 0413699 is taken to have come into force on 16 December 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 Parliament of Australia, provides for the imposition of customs duties on goods imported into Australia. Among its provisions, Part XVA facilitates the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs may reduce the rate of customs duty on specified goods under certain conditions. The problem this legislation addresses is the facilitation of more affordable importation of goods that are not produced domestically, thereby potentially stimulating trade and economic activity. The policy objective, as articulated in the explanatory statement for Tariff Concession Instrument No. 0413699, is to provide tariff concessions on certain meat steamers applied for by McDonald's Australia Ltd, ensuring a lower duty rate from the general 5% to 3% for these goods. This tariff concession was granted following a determination by the CEO that no substitutable goods were being produced in Australia, thereby meeting the core criteria outlined in the Customs Act 1901.
Scope and Application
The Customs Act 1901 applies to all individuals and entities engaged in importing goods into Australia and any other person or entity with interests in the importation process, including freight forwarders, customs brokers, and warehouse operators. Specifically, the Act pertains to the application and assessment of Tariff Concession Orders (TCOs), which are issued under Part XVA of the Act by the Chief Executive Officer of Customs. These orders provide for lower rates of customs duty on specified goods. The application process for TCOs is outlined in section 269F, which mandates that applicants must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, and 269E of the Act. Notably, certain goods listed in section 269SJ are ineligible for TCOs. The geographic reach of this legislation is national, as it applies across all states and territories in Australia, and it also adheres to the broader international obligations of Australia under various trade agreements. The TCO process includes public consultation as stipulated in section 269K, although in this instance, no submissions were received. The instrument in question, TCO No. 0413699, became effective on 16 December 2004, the date the application was lodged, and it does not retroactively affect the rights of any person or impose new liabilities on anyone for actions taken before its effective date.
Key Provisions
The main operative sections of the Customs Act 1901, as detailed in Tariff Concession Instrument No. 0413699, allow the Chief Executive Officer (CEO) of Customs to grant Tariff Concession Orders (TCOs) that provide for reduced rates of customs duty on specified goods. Specifically, section 269F of the Act outlines the application process for a TCO, while section 269C details the core criteria that must be met for the CEO to grant such an order. These criteria include the absence of substitutable goods produced in Australia on the date the application is lodged, as defined by sections 269D, 269E, and 269B of the Act. Once the CEO is satisfied that the application meets these criteria, a TCO can be issued, as stipulated in section 269P(3) of the Act, reducing the customs duty on the specified goods.
The Act imposes several obligations on parties and entities it governs. Firstly, any person seeking a TCO must apply to the CEO in accordance with section 269F, ensuring that their application adheres to the core criteria set out in section 269C. Additionally, the CEO is mandated to publish a notice in the Gazette, inviting submissions from any interested parties regarding the proposed TCO, as outlined in subsection 269K(1). The CEO must consider these submissions before making a decision on whether to grant the TCO. Furthermore, the CEO must ensure that the TCO does not adversely affect the rights of any person as of the date of registration and does not impose any new liabilities, as per the provisions of the Act.
Breaches of the provisions outlined in the Customs Act 1901 can result in civil or criminal penalties, although the specific offences and penalties are not detailed in the Explanatory Statement. The general implication is that any failure to comply with the Act’s requirements, including the improper application for a TCO or the CEO’s failure to adhere to procedural obligations, could lead to legal consequences. However, the maximum penalties for such breaches are not specified within the provided text, leaving the exact consequences subject to broader legal interpretation and applicable statutes.