EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506108
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.
Beringer Blass Wine Estates Ltd applied for a TCO in respect of certain bottling lines on 20 May 2005.
Instrument
TCO No 0506108 was made on 07 October 2005. It declares that those certain bottling lines 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. 0506108 is taken to have come into force on 20 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 was enacted to facilitate the regulation of customs and provide for the imposition of duties on imported goods. The Act introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on specified goods. This concession is designed to support industries where locally produced substitutable goods do not exist, thereby encouraging the importation of goods that would otherwise be prohibitively expensive. The Explanatory Statement for Tariff Concession Instrument No. 0506108, made in 2005, outlines the process for applying for such concessions and the criteria that must be met, including the absence of substitutable goods produced in Australia. The CEO's decision to grant the concession in this case was based on the satisfaction that no such substitutable goods were available, resulting in a tariff reduction for specific bottling lines from 5% to free duty.
Scope and Application
The Tariff Concession Instrument No. 0506108 under the Customs Act 1901 applies to specific goods in relation to which a Tariff Concession Order (TCO) has been made, thereby granting them a lower rate of customs duty. This legislation pertains to any person or entity that applies for a TCO on behalf of goods that meet the core criteria, ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The instrument extends its reach to the national level within Australia, as it is governed by the Commonwealth under the Customs Act 1901 and the Customs Tariff Act 1995. The application process for a TCO involves a detailed assessment by the Chief Executive Officer of Customs (CEO) to ensure compliance with the outlined criteria, and once granted, the concession applies retroactively to the date the application was lodged. Notably, the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities for actions taken before its registration. Additionally, importers of the affected goods may apply for a refund of duty paid since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0506108, are sections 269C, 269F, 269K(1), and 269P(3) of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. The core criteria, as defined in section 269C, include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269K(1) requires the CEO to publish a notice in the Gazette after accepting a TCO application as valid, inviting any person to lodge a submission if they believe the TCO should not be made. Section 269P(3) mandates the CEO to make a written order if satisfied that the application meets the core criteria.
The obligations and requirements imposed by this Act on parties or entities it governs include the necessity for the CEO to evaluate applications for TCOs against the core criteria. If the CEO is satisfied that an application meets these criteria, they must proceed to make a TCO. This involves publishing a notice in the Gazette and considering any submissions received in response to this notice. The CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's registration date. Importers, in particular, benefit from the ability to apply for a refund of duty on goods imported since the TCO's effective date.
Any breach of the obligations or requirements set out in this legislation could lead to civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act 1901 generally can result in significant penalties. For example, under the Customs Act, penalties can include fines and imprisonment. The maximum penalties can vary depending on the specific breach and the severity of the violation. For instance, offences related to fraudulent behaviour could attract severe penalties, including substantial fines and lengthy imprisonment terms. It is important to refer to the relevant sections of the Customs Act for precise details on penalties associated with specific breaches.