EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510430
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.
Costas Pty Ltd applied for a TCO in respect of certain Fruit Picking Platforms on 8 August 2005.
Instrument
TCO No 0510430 was made on 21 October 2005. It declares that those certain Fruit Picking Platforms 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. 0510430 is taken to have come into force on 8 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 Customs Act 1901 was enacted to provide for the administration of customs and excise duties and the control of goods imported into or exported from Australia. This Act was designed to address the need for a structured approach to managing customs duties and trade regulations. Enacted by the Parliament of Australia, the Act established a framework for the assessment and collection of customs duties, as well as the regulation of imported and exported goods. The policy objective of the Act is to facilitate trade while ensuring compliance with customs regulations and protecting domestic industries where necessary. One mechanism within the Act is the ability to grant Tariff Concession Orders (TCOs) under Part XVA, allowing for reduced customs duty rates on certain goods, provided specific criteria are met. This concession aims to support industries by lowering the cost of imported goods that are not produced domestically, thereby promoting competition and economic efficiency.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs. This Act applies to individuals or entities, such as Costas Pty Ltd in this instance, that seek a reduction in customs duty on imported goods through the application for a TCO. The Act mandates that the CEO must make a TCO if certain criteria are met, namely that no substitutable goods are produced in Australia at the time of the application. The instrument, TCO No. 0510430, applies to certain Fruit Picking Platforms and has reduced their duty rate from 5% to 0%, effective from the date the application was lodged, 8 August 2005. The geographic and jurisdictional reach of the Act is national, as it operates under the Commonwealth's authority. The application of the Act is not restricted by state or territory boundaries. The Act does not impose any liabilities on persons other than the Commonwealth and does not affect existing rights adversely. However, it does provide benefits to importers who may now apply for a refund of duty on goods imported since the TCO's effective date. The Act can be further extended or specified through subordinate instruments such as regulations or additional orders made by the CEO.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0510430 under the Customs Act 1901 (sections 269C, 269F, 269P, and 269S) outline the conditions and process for granting a Tariff Concession Order (TCO). Specifically, section 269F allows an application for a TCO to be made to the Chief Executive Officer of Customs (CEO). If the CEO is satisfied that the application is valid and meets the core criteria, which include ensuring no substitutable goods were produced in Australia on the day the application was lodged (section 269C), they must make a TCO. The TCO specifies the goods and the reduced duty rate applicable, as seen in this instance where Fruit Picking Platforms are granted a zero percent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved include the requirement for Costas Pty Ltd to ensure their application for a TCO is valid and meets the specified criteria. The CEO, upon receiving a valid application, must make a written TCO if the core criteria are satisfied. Additionally, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (subsection 269K(1)). In this case, no objections were received.
The Act further delineates the consequences for non-compliance with the TCO provisions. If the CEO fails to make a TCO when the application meets the core criteria, or if there is any maladministration in the process, it could lead to legal challenges or administrative reviews. However, the Explanatory Statement does not explicitly detail specific offences, penalties, or civil/criminal consequences within the text of this TCO instrument. It is worth noting that general provisions within the Customs Act 1901 and associated regulations might impose penalties for non-compliance, which could include fines or other administrative sanctions. The TCO itself ensures that it does not disadvantage any person or impose new liabilities for actions taken prior to its registration.