EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505964
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.
Joseph Lee & Co Pty Ltd applied for a TCO in respect of certain blenders on 18 May 2005.
Instrument
TCO No 0505964 was made on 23 September 2005. It declares that the certain blenders 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 free.
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. 0505964 is taken to have come into force on 18 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 Commonwealth Parliament, establishes a framework for the administration of customs duties and other import charges in Australia. One of the provisions within this Act is Part XVA, which outlines the procedure for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods. The purpose of Tariff Concession Instrument No. 0505964, introduced in 2005, is to address the need for tariff concessions on certain goods, in this case, specific blenders, to ensure that Australian businesses can remain competitive without undue financial burden from import duties. The policy objective of this instrument is to facilitate the importation of these goods at a reduced duty rate, thereby supporting economic efficiency and fairness in the marketplace.
Scope and Application
The Tariff Concession Instrument No. 0505964, made under the Customs Act 1901, applies to the specific category of goods known as certain blenders. It targets entities such as importers and suppliers of these goods by providing a concessional rate of customs duty. The Act’s application is confined to the Commonwealth jurisdiction and does not extend to state or territory laws. A Tariff Concession Order (TCO) was issued on 23 September 2005, following an application by Joseph Lee & Co Pty Ltd on 18 May 2005, which became effective from the date of the application. This TCO exempts the specified blenders from the general customs duty rate of 5%, making the duty rate for these goods free. The Act excludes certain goods, as outlined in section 269SJ, from being subject to a TCO. Additionally, the application process requires public consultation, although no submissions were received in response to the notice published in the Gazette. The commencement of the TCO ensures that it does not adversely affect the rights of any person, nor does it impose new liabilities on individuals or entities.
Key Provisions
The Tariff Concession Instrument No. 0505964 under the Customs Act 1901 (the Act) provides for a tariff concession order (TCO) for certain blenders. Under section 269P(3) (3) of the Act, if the Chief Executive Officer of Customs (the CEO) is satisfied that a TCO application meets the core criteria, they must make a written order 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 applies. For the blenders in question, the TCO specifies that they are subject to item 50 of Schedule 4, resulting in a duty rate of free, as opposed to the general rate of 5%.
The obligations imposed by the Act on the parties governed by it include the requirement for an applicant to ensure their application for a TCO meets the core criteria, as outlined in sections 269C and 269SJ (C and SJ). The CEO must then decide whether the application meets these criteria and, if satisfied, make a written order. Section 269K(1) (K(1)) mandates the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Additionally, the Act ensures that 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 in respect of anything done or omitted to be done before the date of registration.
Breaching the requirements set forth in the Act can result in various consequences. Although the explanatory statement does not detail specific offences, penalties, or consequences for non-compliance, it is reasonable to infer that breaches of the Act’s provisions could lead to legal actions. For instance, failure to correctly apply for a TCO or the CEO not adhering to the statutory requirements when making a TCO could result in civil or criminal penalties. However, the maximum penalties, if any, are not explicitly stated in the provided text. It is also important to note that the TCO does not impose any liabilities on any person, which further underscores the regulatory intent to protect the rights of those affected by the TCO.