EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515970
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.
Goodman Fielder Consumer Foods Pty Ltd applied for a TCO in respect of certain extruded confectionery cooling tunnels on 14 November 2005.
Instrument
TCO No 0515970 was made on 30 January 2006. It declares that those certain extruded confectionery cooling tunnels 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. 0515970 is taken to have come into force on 14 November 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. 0515970, enacted in 2006 under the Customs Act 1901, was introduced to address the need for a streamlined process through which businesses can apply for tariff concessions on certain imported goods. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to assess and approve Tariff Concession Orders (TCOs) that apply reduced rates of customs duty to specific goods, provided no substitutable goods are produced in Australia. This instrument was developed in response to an application by Goodman Fielder Consumer Foods Pty Ltd for a TCO concerning extruded confectionery cooling tunnels. The policy objective is to ensure that Australian businesses have access to competitively priced imported goods, thereby facilitating economic efficiency and consumer benefits. The instrument came into force on the date the application was lodged, 14 November 2005, and does not disadvantage any existing rights or impose new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 0515970, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which reduce the rate of customs duty on certain goods. This Act applies to any person who applies for a TCO in respect of goods that are not specified in section 269SJ, provided that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The TCO process is designed to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the day the TCO came into force, without imposing any new liabilities. The geographic scope of this legislation is national, as it is an instrument of the Commonwealth of Australia and applies across the country. The Act does not specify exclusions or thresholds beyond those detailed in section 269SJ, and the CEO’s decision to issue a TCO is subject to the core criteria set out in sections 269C, 269D, and 269E of the Act. The commencement of a TCO is effective from the date the application was lodged, with no retrospective effect on existing rights or liabilities.
Key Provisions
The Tariff Concession Order No. 0515970 made under the Customs Act 1901, pertains to certain extruded confectionery cooling tunnels and provides a concessionary rate of customs duty, which is free instead of the general rate of 5%. This order is effective from 14 November 2005, the date on which the application was lodged (subsection 269S(1)). The application process requires that the goods in question do not have substitutable equivalents produced in Australia in the ordinary course of business (section 269C). In this instance, the Chief Executive Officer of Customs (CEO) was satisfied that no such substitutable goods were produced in Australia, leading to the issuance of the TCO.
The obligations imposed by the Act on the parties governed by this TCO are primarily administrative and procedural. The CEO is mandated to consider applications for TCOs and to ensure that the core criteria outlined in the Act are met. This includes publishing a notice in the Gazette inviting submissions from any interested parties if the application is deemed valid (subsection 269K(1)). In this case, no submissions were received, which facilitated the progression of the application. Importers of the specified goods are also granted specific rights, such as the ability to apply for a refund of duty paid on imports since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Breaches of the provisions outlined in the Customs Act 1901 can result in both civil and criminal consequences. Civil penalties may include fines and other monetary penalties as prescribed by the relevant laws. For criminal offences, the penalties can be severe, including imprisonment. The specific maximum penalties are not detailed in the Explanatory Statement but would be governed by the broader provisions of the Customs Act 1901 and related legislation. It is important for all parties involved, including applicants, the CEO, and importers, to adhere to the legislative requirements to avoid any adverse legal consequences.