EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514781
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.
Murray Goulburn Co-Op Co Ltd applied for a TCO in respect of certain Milk Trolleys on 19 October 2005.
Instrument
TCO No 0514781 was made on 16 January 2006. It declares that those certain Milk Trolleys 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. 0514781 is taken to have come into force on 19 October 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 Australian Parliament, provides a framework for the regulation of customs and excise, including provisions for Tariff Concession Orders (TCOs) which can reduce the rate of customs duty on certain goods. The Customs (Tariff Concession) Instrument No. 0514781, made in 2006, addresses the problem of applying a lower rate of customs duty to goods that meet specific criteria, thereby promoting economic efficiency by reducing the cost of imported goods for which no suitable Australian-made alternatives exist. The instrument was created in response to an application by Murray Goulburn Co-Op Co Ltd for tariff concessions on certain Milk Trolleys, and the policy objective is to facilitate the importation of these goods without imposing any disadvantage or additional liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. These orders are applicable to goods for which a TCO application is made and approved by the CEO, provided the goods do not fall under the categories specified in section 269SJ of the Act that are ineligible for tariff concessions. The application must meet the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia on the day the application is lodged, with terms such as "substitutable goods" and "ordinary course of business" defined in sections 269D and 269E of the Act respectively. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting submissions from any person who may have reasons to oppose the concession, although in this case no submissions were received. The TCO applies from the date the application was lodged, as per subsection 269S(1), and benefits importers by potentially allowing them to claim refunds of duty on goods imported since the effective date of the concession. Importantly, the TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0514781, under the Customs Act 1901, establish the framework for making Tariff Concession Orders (TCOs) that reduce the rate of customs duty for specific goods. When the Chief Executive Officer of Customs (CEO) is satisfied that the application for a TCO meets the core criteria, they must issue a written order (sections 269F and 269C). The CEO must also ensure that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269P(3). The CEO's decision to grant a TCO is published in the Gazette, inviting any interested party to lodge a submission (section 269K(1)). This particular Instrument, TCO No. 0514781, was made on 16 January 2006, declaring that certain Milk Trolleys are subject to a 0% duty rate, a reduction from the general 5% duty rate.
The obligations imposed by the Act on the parties include the requirement for the CEO to assess TCO applications against the core criteria, which include the absence of substitutable goods produced in Australia (section 269C). Murray Goulburn Co-Op Co Ltd fulfilled its obligation by applying for the TCO on 19 October 2005, and the CEO was responsible for determining the application's validity and issuing the written order if the criteria were met. The CEO's obligation to publish the notice in the Gazette, inviting submissions from interested parties, was also fulfilled, though no submissions were received in this instance. Additionally, the Act mandates that the TCO does not affect the rights of any person as at the date of registration concerning anything done or omitted before the registration date (section 269S(1)).
The Act delineates specific offences and penalties for breaches, although in this context, the primary focus is on administrative compliance rather than punitive measures. However, failure to adhere to the stipulated procedures or making false statements in the TCO application could lead to administrative penalties. The Act does not explicitly state maximum penalties for breaches in this specific context, but general provisions of the Customs Act 1901 may apply, including fines and imprisonment for serious breaches.
Overall, Tariff Concession Instrument No. 0514781 facilitates tariff concessions for certain Milk Trolleys by lowering their customs duty rate, provided all statutory criteria and obligations are met. The CEO's role is pivotal in ensuring that the application process is transparent and that the rights of all parties are protected. The Act's provisions ensure that any administrative or compliance issues are addressed within a defined legal framework, maintaining the integrity of the tariff concession scheme.