EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509093
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 French Fry Dryers on 5 July 2005.
Instrument
TCO No 0509093 was made on 23 September 2005. It declares that those certain French Fry Dryers 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. 0509093 is taken to have come into force on 5 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 Customs Act 1901, enacted by the Parliament of Australia, established a framework for the regulation of customs duties and the facilitation of international trade. To address the need for flexibility in applying customs duties, particularly to support industries where local production of certain goods is not feasible, the Act introduced the mechanism of Tariff Concession Orders (TCOs) under Part XVA. These orders allow the Chief Executive Officer of Customs to grant lower rates of customs duty on specified goods, provided certain criteria are met, such as the absence of substitutable goods being produced in Australia. The Tariff Concession Instrument No. 0509093, made on 23 September 2005, exemplifies this mechanism by granting a concession on French Fry Dryers, reducing their duty rate from 5% to 0% based on the absence of locally produced alternatives. This legislative approach aims to support industries by making imported goods more competitively priced, thus encouraging their use and integration into the domestic market without imposing undue financial burdens or liabilities on importers.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0509093, applies to individuals and entities seeking tariff concessions for specific imported goods, notably French Fry Dryers in this instance, provided they meet the core criteria outlined in the Act. The instrument is applicable across Australia and is subject to the conditions specified in the Customs Tariff Act 1995, which dictates the rates of customs duty. The Act extends its reach to all Australian importers of the specified goods, thereby directly affecting their rights and obligations concerning customs duty. Any person or entity applying for a Tariff Concession Order (TCO) must ensure that the goods in question are not substitutable by Australian-made products and that the application complies with the legislative criteria. The TCO does not retroactively affect any pre-existing rights or liabilities, safeguarding the interests of all parties involved except the Commonwealth. Subordinate instruments may further define or extend the application of the TCO, ensuring that the concessions align with the broader customs framework.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for the imposition of customs duty on goods imported into Australia. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, and the goods are not specified in section 269SJ, the CEO must make a TCO, declaring that the goods are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995 (the Tariff). This is achieved through section 269P(3), which mandates the CEO to issue a written order once satisfied that no substitutable goods were produced in Australia in the ordinary course of business, as per section 269B and 269D. The TCO instrument number 0509093, made on 23 September 2005, declares that certain French Fry Dryers are subject to a 0% duty rate under item 50 of Schedule 4 of the Tariff, given that the CEO found no substitutable goods were produced in Australia.
The Act imposes several obligations on the parties involved. Firstly, section 269K(1) requires the CEO to publish a notice in the Gazette once a TCO application is accepted as valid. This notice must include an invitation for any person who believes there are reasons against making the TCO to submit their views to the CEO. In this instance, no submissions were received. Additionally, under section 269S(1), a TCO is deemed to come into force on the day the application is lodged. TCO No. 0509093 is thus taken to have come into force on 5 July 2005, the date the application was made. This order does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person. Importers of the affected goods will benefit from this order, as they can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements set out in the Act may result in various consequences. While the Act does not specify particular offences under the TCO process, breaches of other sections of the Customs Act may incur civil or criminal penalties. For instance, knowingly making a false statement in a customs declaration can result in a civil penalty of up to $22,200 or a criminal penalty of up to 2 years imprisonment. Furthermore, engaging in activities that mislead or deceive the CEO regarding the nature of goods can lead to fines and imprisonment under the general provisions of the Customs Act. It is essential for all parties to adhere to the statutory requirements to avoid potential legal ramifications.