EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509606
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 foodstuff pump dippers on 20 July 2005.
Instrument
TCO No 0509606 was made on 07 October 2005. It declares that those certain foodstuff pump dippers 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. 0509606 is taken to have come into force on 20 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, as supplemented by Tariff Concession Instrument No. 0509606 enacted in 2005, introduces a framework enabling the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower customs duty rates on specific goods. This mechanism was established to address the issue of ensuring that Australian industries remain competitive by allowing duty-free imports of goods that cannot be locally produced or are not produced in sufficient quantities to meet demand. The policy objective is to facilitate the availability of certain goods in the Australian market without imposing additional financial burdens on importers, thereby supporting economic efficiency and consumer choice. The instrument was enacted by the Australian Parliament and became effective on the date the application was lodged, in this case, 20 July 2005. The introduction of this TCO ensures that importers of specified goods, such as certain foodstuff pump dippers, are not disadvantaged by customs duties and can benefit from duty-free imports, as long as no substitutable goods are produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0509606, issued under the Customs Act 1901, applies to individuals or entities seeking tariff concessions on specific goods, in this case certain foodstuff pump dippers. The scope of the legislation encompasses those who apply for a Tariff Concession Order (TCO) with the Chief Executive Officer of Customs (CEO) and who meet the core criteria outlined in the Act. The Act provides a framework for the CEO to assess applications for tariff concessions, ensuring that such concessions are only granted if the goods in question are not substitutable by Australian-made products and are not subject to exclusions as specified in section 269SJ. The instrument has a national reach within Australia and is effective from the date the application was lodged, in this instance, 20 July 2005. The application of this particular TCO does not retroactively affect the rights or liabilities of any person other than the Commonwealth, and it specifically benefits importers by allowing them to claim refunds on duties paid on the relevant goods since the effective date of the TCO. The CEO's decision to issue the TCO was made without any submissions from the public, as no objections were raised following the publication of the application in the Gazette.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0509606 under the Customs Act 1901 (section 269C) are those that outline the conditions under which a Tariff Concession Order (TCO) may be made. Specifically, section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269D and 269E, which explain the meaning of "goods produced in Australia" and "ordinary course of business", respectively. Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to make a written order (a TCO) if satisfied that the application meets these core criteria.
The obligations imposed by the Act on parties applying for a TCO include ensuring that their application is not in respect of goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The CEO must also ensure that the application meets the core criteria outlined in section 269C. Once an application is accepted, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made. In this case, the CEO did not receive any submissions.
Failure to comply with the requirements set out in the Customs Act 1901 may result in civil or criminal consequences. While the explanatory statement does not specify penalties, breaches of customs regulations typically incur fines and, in serious cases, imprisonment. The exact penalties would depend on the specific nature of the breach and could be found in the relevant sections of the Customs Act 1901 and the Customs Regulations 1995. The rights of importers are protected under paragraph 126(1)(r) of the Regulations, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.