EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504881
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.
Unilever Australasia applied for a TCO in respect of certain Display Freezers 2 May 2005.
Instrument
TCO No 0504881 was made on 23 September 2005. It declares that those certain Display Freezers 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. 0504881 is taken to have come into force on 2 May 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 Customs Act 1901, enacted by the Parliament of Australia, provides for the regulation of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs) to offer tariff concessions on certain goods. The problem or gap addressed by the Act is the need for a mechanism to lower customs duty on imported goods under specific circumstances, such as when no substitutable goods are produced in Australia. The Act was amended to include provisions for the CEO of Customs to make TCOs based on applications, subject to certain criteria being met. Policy objectives include facilitating trade and economic activity by reducing the cost of importing specific goods. This particular TCO, No. 0504881, was made in response to an application from Unilever Australasia for certain Display Freezers, reducing the duty on these goods from 5% to 0%.
Scope and Application
The Customs Act 1901, through Part XVA, provides the framework for Tariff Concession Orders (TCO) that allow for a lower rate of customs duty on specified goods. This Act applies to any person or entity that seeks to import goods that are not produced in Australia in the ordinary course of business and are not specified in section 269SJ of the Act as ineligible for a TCO. The application process involves submitting an application to the Chief Executive Officer (CEO) of Customs, who then determines if the application meets the core criteria outlined in section 269C. If satisfied, the CEO issues a TCO that specifies the goods and the applicable reduced rate of duty. The TCO has a national reach across Australia, affecting the importation of goods subject to the order. There are no exclusions or exemptions explicitly stated in the explanatory statement, but the application process itself includes an invitation for public submissions to ensure transparency and fairness. The TCO No. 0504881, effective from 2 May 2005, specifically lowered the duty on certain Display Freezers from 5% to 0%.
Key Provisions
The Tariff Concession Order No. 0504881, made under section 269P(3) of the Customs Act 1901, declares that certain Display Freezers are subject to a 0% rate of customs duty, rather than the general rate of 5%. This decision was made by the Chief Executive Officer of Customs (CEO) on 23 September 2005, following an application by Unilever Australasia on 2 May 2005. The order is based on the CEO's satisfaction that no substitutable goods were produced in Australia at the time of the application, meeting the core criteria set out in section 269C of the Act.
The Act imposes certain obligations on the CEO when considering a Tariff Concession Order (TCO) application. According to section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be made. In this case, the CEO published the notice but did not receive any submissions. Once the CEO is satisfied that the application meets the core criteria, they must make a written TCO order, as per section 269P(3). The TCO in question came into force on the day the application was lodged, in line with subsection 269S(1).
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal consequences. The Act provides for penalties, including fines and imprisonment, for breaches of its provisions. However, the specific penalties for breaching the TCO provisions are not detailed in the provided text. The rights of importers are positively affected by this TCO, allowing them to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not disadvantage any person or impose liabilities in respect of actions taken before the TCO's registration date.