EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507314
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.
Matildas Fresh Foods Pty Ltd applied for a TCO in respect of certain Vegetable Floretter on 10 June 2005.
Instrument
TCO No 0507314 was made on 2 September 2005. It declares that those certain Vegetable Floretters 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. 0507314 is taken to have come into force on 10 June 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, provides a framework for the regulation of imports and exports in Australia. Specifically, Part XVA of the Act outlines a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty on goods that meet certain criteria, promoting trade and economic efficiency. The problem this legislation addresses is the need for a mechanism to reduce customs duty on goods where no suitable Australian-made alternatives exist, thus facilitating access to imported goods and potentially lowering costs for businesses and consumers. The policy objective is to encourage international trade by making imported goods more competitively priced.
In the case of Matildas Fresh Foods Pty Ltd, a TCO was made on 2 September 2005, following an application on 10 June 2005 for certain Vegetable Floretters. The CEO determined that no substitutable goods were produced in Australia, and thus, the TCO was issued to apply a 0% duty rate on these goods, down from the general rate of 5%. The CEO published a notice in the Gazette inviting any objections to the TCO, but no submissions were received. The TCO came into effect on the date the application was lodged, 10 June 2005, without affecting the rights of any persons as at the date of registration. This TCO specifically benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0507314, made under the Customs Act 1901, applies to the specific goods referred to in the instrument, namely certain Vegetable Floretters, and is targeted at those who import these goods into Australia. The Act applies to any person or entity involved in the importation of these goods, effectively granting a concessional rate of customs duty for the specified items. This concession is available on a national level, as the Customs Act operates across the Commonwealth of Australia. The instrument does not exclude any particular categories of importers or exporters, provided they comply with the conditions specified in the Act. The instrument also does not impose any new liabilities on the parties involved, and it ensures that the rights of individuals and entities are protected, particularly in relation to transactions occurring prior to the effective date of the concession. Any subordinate instruments or regulations that may further detail the application or administration of the TCO would need to be considered in conjunction with the primary Act.
Key Provisions
The Tariff Concession Instrument No. 0507314 under the Customs Act 1901 (section 269F) outlines the process for granting tariff concessions on specific goods. If an application for a Tariff Concession Order (TCO) is lodged and deemed valid, the Chief Executive Officer of Customs (CEO) must consider whether the goods in question meet the core criteria set out in section 269C. This involves verifying that no substitutable goods, as defined by section 269D, were produced in Australia in the ordinary course of business at the time the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring the goods eligible for the concession.
The obligations imposed by this Act on the parties involved, particularly the CEO, include the timely publication of notices in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections to the granting of a TCO. In the case of TCO No. 0507314, no objections were received. The CEO must also ensure that any TCO does not adversely affect the rights of persons other than the Commonwealth as at the date of registration and does not impose any liabilities on such persons.
Under the Customs Act 1901, breaches of the provisions governing TCOs could result in various consequences. While the explanatory statement does not specify particular offences or penalties, it is likely that non-compliance with the statutory requirements for TCOs could lead to administrative or legal actions. For instance, if the CEO fails to adhere to the procedural requirements, such as not publishing a notice in the Gazette as required by subsection 269K(1), this could potentially lead to challenges in the validity of the TCO, or even nullification of the order. The penalties for such breaches would depend on the specific nature of the non-compliance and could range from administrative sanctions to more severe legal consequences if the breach has significant financial or regulatory implications.