EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0503635
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.
Gold Coast bakeries (Qld) Pty Ltd applied for a TCO in respect of certain dough dividers on 30 March 2005.
Instrument
TCO No 0503635 was made on 3 June 2005. It declares that those certain dough dividers 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 0%.
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. 0503635 is taken to have come into force on 30 March 2005.
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. 0503635 was introduced in 2005 under the Customs Act 1901 to address the gap in tariff concessions for certain imported goods. This legislative instrument, enacted by the Australian government, allows for a reduced rate of customs duty on specific goods, provided that no substitutable goods are produced in Australia. The Customs Act 1901, administered by the Chief Executive Officer of Customs, facilitates this scheme to ensure that applications for tariff concessions are processed in line with the Act’s provisions. The policy objective behind this instrument is to support businesses by reducing import costs where Australian-made alternatives do not exist, thereby fostering competitive markets and encouraging economic efficiency. The instrument was made following a successful application by Gold Coast Bakeries (Qld) Pty Ltd for tariff concessions on certain dough dividers, which now benefit from a 0% duty rate instead of the general 5%.
Scope and Application
The Tariff Concession Instrument No. 0503635, made under the Customs Act 1901, applies specifically to certain dough dividers used in the baking industry, with the primary focus being on Gold Coast Bakeries (Qld) Pty Ltd. The instrument is concerned with reducing the customs duty rate on these goods from 5% to 0%. The Act applies to any entity or individual that imports or intends to import the specified goods into Australia. The geographic reach of this legislation is nationwide, as it pertains to the Commonwealth of Australia, and it is applicable irrespective of the state or territory where the goods are imported. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The instrument does not extend or restrict its application through subordinate instruments but operates within the parameters set by the primary Act. The commencement date for the effect of this Tariff Concession Order is 30 March 2005, the date on which the application was lodged. Importantly, this order does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on persons in respect of actions taken prior to the order's registration.
Key Provisions
The Customs Act 1901, under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs (CEO) can set lower rates of customs duty on certain goods (s 269F). The core criteria for a TCO application to be successful are outlined in section 269C, which requires that, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P respectively. If the CEO is satisfied that these core criteria are met, they must make a written order (s 269P(3)).
The obligations under the Act require that upon receiving a valid application for a TCO, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). If no submissions are received, the CEO proceeds to make the order. The TCO in question, No. 0503635, was made on 3 June 2005, declaring that certain dough dividers are subject to a zero percent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995 (s 269S(1)). This order came into effect on the date the application was lodged, 30 March 2005.
Breach of the conditions under which a TCO is granted could lead to a variety of consequences. While the explanatory statement does not specify the exact penalties for non-compliance, general provisions in the Customs Act 1901 and the Customs Tariff Act 1995 would apply. Such breaches could result in the imposition of penalties, including fines and other civil or criminal sanctions. The maximum penalties for offences under these acts can vary significantly depending on the nature and severity of the breach, but they often include substantial fines and, in some cases, imprisonment.