EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507315
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.
Golden Circle Ltd applied for a TCO in respect of certain processing and packaging lines on 10 June 2005.
Instrument
TCO No 0507315 was made on 2 September 2005. It declares that those certain processing and packaging 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. 0507315 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 Australian Parliament, provides a framework for the administration of customs and excise duties, among other things. The Act was introduced to address the need for a structured approach to managing international trade and protecting domestic industries by regulating the import and export of goods. Under Part XVA of the Act, Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, providing a lower rate of customs duty on specified goods. The Tariff Concession Instrument No. 0507315, made in 2005, exemplifies the application of this scheme. In this case, Golden Circle Ltd applied for a TCO for certain processing and packaging lines, which was granted after the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria. The order resulted in the specified goods being subject to a duty rate of free, as opposed to the general rate of 5%. The policy objective of this instrument is to support Australian industry by ensuring that certain imported goods, which cannot be produced domestically, are not subject to prohibitively high duties.
Scope and Application
The Tariff Concession Instrument No. 0507315, issued under the Customs Act 1901, applies to Golden Circle Ltd and specifically to certain processing and packaging lines that the company sought tariff concessions for. This Act facilitates the reduction of customs duties on goods for which a Tariff Concession Order (TCO) is issued by the Chief Executive Officer of Customs (CEO), provided the application meets the specified core criteria. These criteria include the absence of substitutable goods being produced in Australia at the time of application, ensuring that the concession does not undermine local production. The geographic reach of this legislation is national, as it pertains to goods entering Australia. The application of this TCO is governed by the Customs Act 1901 and the Customs Tariff Act 1995, with the latter defining the tariff rates applicable to the specified goods. Exclusions under this Act are limited to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The TCO's application can be further extended or restricted through subordinate instruments, aligning with the overarching framework established by the primary acts.
Key Provisions
The Tariff Concession Instrument No. 0507315 establishes a concession on customs duty for certain processing and packaging lines, as outlined in section 269C(3) of the Customs Act 1901 (the Act). Specifically, this Instrument, made on 2 September 2005, declares that the goods in question, which Golden Circle Ltd applied for on 10 June 2005, are to be subject to a zero rate of duty, rather than the general rate of 5%. This concession applies to goods listed in item 50 of Schedule 4 to the Customs Tariff Act 1995. The Instrument comes into force on the date the application was lodged, as stipulated by subsection 269S(1) of the Act.
Under this Instrument, the Chief Executive Officer of Customs (the CEO) is mandated to evaluate applications for Tariff Concession Orders (TCOs) as per section 269F of the Act. The CEO must ensure that the application does not pertain to goods listed in section 269SJ of the Act, which are ineligible for TCOs. Additionally, the application must meet the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was made. Section 269D, 269E, and 269F further define the terms 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', respectively. If the CEO determines that the application meets these criteria, they must issue a written order, as required by subsection 269P(3) of the Act.
The obligations imposed by the Act on parties and entities include the requirement for the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the making of a TCO, as per subsection 269K(1). In this case, no submissions were received in response to the notice. Moreover, the rights of importers are positively affected by this Instrument. Importers can apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person and does not adversely affect the rights of any person other than the Commonwealth in respect of actions taken before the date of registration.
In terms of consequences for breach, the Act does not explicitly outline specific offences or penalties related to the non-compliance with the TCO provisions. However, general provisions of the Customs Act 1901 apply, and breaches could result in civil or criminal penalties, including fines or imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined by the courts based on the specific circumstances of any alleged non-compliance.