EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508612
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.
Simplot Australia Pty Ltd applied for a TCO in respect of certain horizontal screw blanchers on 05 July 2005.
Instrument
TCO No 0508612 was made on 16 September 2005. It declares that those certain horizontal screw blanchers 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. 0508612 is taken to have come into force on 05 July 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 Tariff Concession Instrument No. 0508612, enacted in 2005 under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods, thereby potentially reducing the financial burden on businesses importing these goods. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs), which lower the customs duty rate for certain goods. This mechanism was introduced to assist Australian businesses by allowing them to import goods more cost-effectively, provided no substitutable goods are produced in Australia. The policy objective is to facilitate trade by reducing customs duties on goods for which no domestic equivalent exists, thus supporting economic efficiency and competitiveness. The instrument was effective from the date the application was lodged, 5 July 2005, and no submissions were received in response to the public notice inviting objections to the concession.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can lower the rate of customs duty on specific goods, subject to an application process where the CEO must ascertain that the goods are not among those specified in section 269SJ as ineligible for a concession and that no substitutable goods are produced in Australia. An application that meets these core criteria will result in the CEO issuing a written TCO. The TCO No. 0508612, made in response to a 2005 application by Simplot Australia Pty Ltd for certain horizontal screw blanchers, declared these goods eligible for duty-free treatment under item 50 of Schedule 4 to the Customs Tariff Act 1995, as no substitutable goods were produced in Australia. This instrument applies nationally and affects the customs duty rates for the specified goods from the date the application was lodged, without imposing any liabilities on entities other than the Commonwealth or affecting pre-existing rights.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0508612 under the Customs Act 1901, as explained in the accompanying explanatory statement, involve the creation and implementation of Tariff Concession Orders (TCOs) for specific goods. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not specified in section 269SJ. Once the application is deemed valid and meets the core criteria outlined in sections 269C, 269B, and 269D, the CEO must issue a written order (section 269P(3)). This TCO, such as Tariff Concession Order No. 0508612, declares that the specified goods are subject to a lower rate of customs duty as outlined in the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. For instance, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application (subsection 269K(1)). This notice invites any person who may have objections to the TCO to submit their concerns. Additionally, section 269C requires the CEO to ensure that the application meets the core criteria, which include verifying that no substitutable goods are produced in Australia on the date the application was lodged. The CEO must also ensure that the application does not pertain to goods listed in section 269SJ, which are ineligible for TCOs.
There are also specific legal consequences for breaches of the Act or non-compliance with TCOs. Although the explanatory statement does not detail specific offences or penalties, the Customs Act 1901 generally provides for penalties for non-compliance with customs regulations. These can include fines and imprisonment for serious breaches. The Tariff Concession Instrument itself does not introduce new penalties but operates within the existing framework of the Customs Act. It ensures that the rights of individuals, other than the Commonwealth, are not adversely affected by the TCO and that any duties paid prior to the TCO's effective date are eligible for a refund under regulation 126(1)(r).