EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509811
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 Beverage Preparation Line on 25 July 2005.
Instrument
TCO No 0509811 was made on 30 September 2005. It declares that those certain Beverage Preparation Line 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. 0509811 is taken to have come into force on 25 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. 0509811, enacted in 2005, amends the Customs Act 1901 to address the need for tariff concessions on specific goods, facilitating more competitive pricing in the Australian market. This instrument was introduced to provide relief to importers by reducing customs duty on certain goods, thus addressing a gap in the tariff scheme by allowing for targeted tariff reductions that can stimulate trade and economic growth. The instrument was made by the Chief Executive Officer of Customs under the authority granted by the Customs Act 1901, ensuring that the application of tariff concessions adheres to the established criteria and legislative framework. The policy objective is to ensure that Australian consumers and businesses benefit from reduced costs on imported goods, thereby enhancing the overall competitiveness of these goods within the domestic market.
Scope and Application
The Tariff Concession Instrument No. 0509811 under the Customs Act 1901 applies to the concession of customs duty for certain Beverage Preparation Lines, which were the subject of an application by Golden Circle Ltd on 25 July 2005. The Act applies to the Chief Executive Officer of Customs (CEO) who is tasked with deciding whether to grant a Tariff Concession Order (TCO) based on the criteria outlined in the Act. Specifically, the CEO must ensure that no substitutable goods are produced in Australia on the day the application was lodged. Upon satisfying this condition, the CEO is required to make a written order declaring that the specified goods are subject to a reduced rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995. The instrument became effective on 25 July 2005, the date the application was lodged, and does not disadvantage any person or impose liabilities on anyone for actions taken before its registration. This concession is limited to the goods specified in the TCO and does not extend to other goods or entities unless similarly applied for and approved.
Key Provisions
The Tariff Concession Instrument No. 0509811, made under the Customs Act 1901, pertains to the application and implementation of Tariff Concession Orders (TCOs) for specific goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not specified in section 269SJ as ineligible. If the CEO determines that the application meets the core criteria outlined in sections 269C, 269B, and 269D, a TCO is issued. In this case, the CEO found that no substitutable goods were produced in Australia, leading to a TCO for certain Beverage Preparation Lines, reducing the duty from 5% to 0%.
The obligations under the Act include the requirement for the CEO to assess the validity of TCO applications against the core criteria and to publish notices in the Gazette inviting submissions from the public. The CEO must also ensure that the TCO does not disadvantage any person by affecting their rights prior to the registration date, as stipulated in section 269S. Additionally, the CEO must consider any submissions received and decide whether to make the TCO, which, in this instance, was issued following the absence of any objections.
The Act imposes civil and criminal consequences for non-compliance with its provisions. While the Explanatory Statement does not detail specific offences under this TCO, general offences under the Customs Act 1901 include providing false or misleading information, which can result in fines and imprisonment. The maximum penalties for such offences vary depending on the severity of the offence, with potential fines reaching up to $165,000 for corporations and imprisonment for up to five years for individuals. These penalties underscore the importance of adhering to the requirements and obligations set forth by the Act.
The commencement of the TCO is effective from the date the application was lodged, as per subsection 269S(1). This means that the benefits of the tariff concession, such as the reduced duty rate, apply retroactively from that date. Importers of the goods subject to the TCO can apply for a refund of duties paid on those goods since the effective date, thereby ensuring they are not disadvantaged by the new tariff rate. Importantly, the TCO does not impose any new liabilities on any person, protecting them from any retrospective financial burdens that might arise from the concession.