EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505963
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.
Tetrapak Marketing applied for a TCO in respect of certain Ice Confectionery Fillers on 18 May 2005.
Instrument
TCO No 0505963 was made on 23 September 2005. It declares that those certain Ice Confectionery Fillers 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. 0505963 is taken to have come into force on 18 May 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, establishes a framework for the imposition of customs duties on imported goods. It provides mechanisms through which the Chief Executive Officer of Customs can grant tariff concession orders to reduce the duty on specific goods, provided certain criteria are met. This process was introduced to address the need for a streamlined method to provide relief on customs duties for goods that are not produced in Australia, thereby promoting competitive market conditions. Tariff Concession Instrument No. 0505963, made on 23 September 2005, is an example of such a concession, applying to certain Ice Confectionery Fillers by reducing their duty rate from 5% to 0%. The instrument aims to benefit importers by providing them with the potential to claim refunds on duties paid on these goods since the effective date of the concession, 18 May 2005, without imposing any new liabilities or disadvantaging existing rights.
Scope and Application
The Tariff Concession Instrument No. 0505963 under the Customs Act 1901 applies to specific goods, namely certain Ice Confectionery Fillers, and it is targeted towards the entity that applied for the concession, Tetrapak Marketing, as well as to any importers of these goods in Australia. This Instrument allows for a reduction in customs duty from the general rate of 5% to 0% for the specified goods, provided that no substitutable goods are produced in Australia. The geographic reach of this legislation is national, applying across all states and territories within Australia. Notably, the legislation does not apply to goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a tariff concession order. The application of the Act may be extended or restricted through subordinate instruments, although this particular Instrument does not introduce any new categories or exclusions beyond what is outlined in the primary Customs Act 1901. The commencement date of this Instrument is the day the application was lodged, 18 May 2004, with no retrospective effect on rights or liabilities of any person other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0505963 are sections 269C, 269F, 269K, and 269P of the Customs Act 1901, along with the relevant provisions of the Customs Tariff Act 1995. Section 269F allows for the application of a Tariff Concession Order (TCO) by any person seeking a concession on customs duty for specified goods. Section 269C sets out the core criteria that must be met for a TCO application to be considered valid, primarily that no substitutable goods were produced in Australia on the day the application was lodged. Section 269K requires the Chief Executive Officer of Customs (CEO) to publish a notice in the Gazette inviting submissions from any interested parties if a TCO application is deemed valid. Section 269P mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written TCO, specifying the applicable item in Schedule 4 of the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations on the CEO regarding TCOs. Firstly, the CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ, which outlines goods that cannot be subject to a TCO. Secondly, the CEO must determine whether the application meets the core criteria stipulated in section 269C. If the application meets these criteria, the CEO must make a written TCO as per section 269P. Additionally, under section 269K, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must also consider any submissions received in response to the notice before making a final decision.
Any breach of the provisions under the Customs Act 1901 can result in civil and criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, under the Customs Act, violations of customs laws can lead to significant penalties. For example, knowingly making a false statement in a customs document can attract a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, under section 232 of the Act. Furthermore, importing goods without the necessary clearance or evading duty can result in fines and imprisonment, with the severity of the penalty depending on the nature and extent of the offence. The Customs Tariff Act 1995 also provides for penalties for non-compliance, which can include fines and other financial penalties as prescribed by the regulations.