EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510006
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.
H.J. Langdon & Co. Proprietary Limited applied for a TCO in respect of certain food dyes and/or colours on 01 August 2005.
Instrument
TCO No 0510006 was made on 28 October 2005. It declares that those certain food dyes and/or colours 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. 0510006 is taken to have come into force on 01 August 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. 0510006, enacted in 2005, is a measure introduced under the Customs Act 1901 to address the need for tariff concessions on specific goods. This instrument was enacted by the Australian Government to provide relief from customs duties for certain goods, thereby facilitating trade and potentially lowering costs for importers. The Customs Act 1901, managed by the Parliament of Australia, outlines the process through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs), which apply a lower rate of customs duty on goods specified in the order. The primary objective of this legislation is to ensure that no substitutable goods are produced in Australia, thereby justifying the concession and benefiting the rights of importers. The instrument came into force on 1 August 2005, the date the application for the tariff concession was lodged.
Scope and Application
The Tariff Concession Instrument No. 0510006, made under the Customs Act 1901, applies to certain food dyes and colours imported into Australia, specifically those that are the subject of a Tariff Concession Order (TCO). This instrument is targeted at entities or individuals importing these goods, offering them a benefit by reducing the rate of customs duty from the general rate of 5% to free, provided that no substitutable goods are produced in Australia. The instrument is a Commonwealth initiative, thus its application extends across all jurisdictions within Australia, although it is specifically governed by federal legislation. The Act does not explicitly mention exclusions or exemptions but implies that if substitutable goods are produced in Australia, the TCO would not apply. The Act’s application can be extended or restricted through subordinate instruments, which may provide additional criteria or conditions for the application of TCOs. The instrument came into effect on the date the application was lodged, 1 August 2005, and does not retroactively affect the rights of any person, ensuring that only future imports benefit from the reduced duty rate.
Key Provisions
The Customs Act 1901, particularly under Part XVA, sets up a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). An application for a TCO can be made by a person in respect of goods, and if the CEO is satisfied that the application is valid and not concerning goods that are ineligible for a TCO (s 269SJ), they must assess whether it meets the core criteria (s 269C). A TCO application meets these criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Here, 'substitutable goods' means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put (s 269D, s 269E, s 269B). If the CEO is satisfied that the application meets the core criteria, they must make a written order (the TCO) declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)).
The Act imposes specific obligations on the CEO, such as deciding whether an application meets the core criteria and making a TCO if satisfied (s 269C, s 269P(3)). It also requires the CEO to publish a notice in the Gazette inviting submissions from anyone who believes the TCO should not be made (s 269K(1)). This ensures transparency and an opportunity for public input, though in this instance, no submissions were received (subsection 269K(1)). A TCO is effective from the date the application was lodged (s 269S(1)).
Under the Act, any breach of the provisions governing TCOs could potentially lead to legal consequences, though specific offences and penalties are not detailed in the explanatory statement. The Act ensures that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on such persons in respect of actions taken before the TCO's registration (subsection 269S(1)). This protects the rights of importers, who can apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).