EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515971
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 confectionery cooking lines on 14 November 2005.
Instrument
TCO No 0515971 was made on 30 January 2006. It declares that those certain confectionery cooking lines 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. 0515971 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 Customs Act 1901 was enacted to provide for the regulation of the import and export of goods, including the imposition of duties and the management of the Customs Tariff. The Act was introduced to address the need for a structured framework governing customs duties, ensuring compliance with international trade agreements and protecting domestic industries. The Tariff Concession Instrument No. 0515971, enacted in 2006, is a specific instrument under the Customs Act, designed to grant tariff concessions on certain goods, thereby facilitating trade by reducing customs duties. This instrument was created by the Chief Executive Officer of Customs following an application by Goodman Fielder Consumer Foods Pty Ltd for tariff concessions on confectionery cooking lines, which were granted as no substitutable goods were being produced in Australia. The instrument effectively reduces the general rate of duty from 5% to free, benefiting importers by allowing them to apply for refunds on duties paid prior to the instrument's effective date.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0515971, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specific goods. This process is available to any person who applies to the CEO for such a concession, provided the goods in question are not among those specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The application is assessed against the core criteria outlined in sections 269C, 269B, 269D, 269E, and 269P of the Act, which determine whether substitutable goods are produced in Australia in the ordinary course of business. If these criteria are met, the CEO issues a written TCO, which in this instance, applies to certain confectionery cooking lines, reducing the duty from a general rate of 5% to free. This legislative instrument operates within the Commonwealth jurisdiction, extending its reach to entities involved in the importation of the specified goods.
The scope of this legislation is specifically tailored to goods subject to a TCO and does not affect the rights of any person, except to the benefit of importers who can apply for duty refunds for goods imported since the TCO's effective date. The TCO does not impose any new liabilities on any person, ensuring that its application is limited to prospective transactions from the date of the application. The process includes mandatory public consultation, although in this case, no submissions were received. The commencement of the TCO is deemed to be effective from the date the application was lodged, which aligns with the statutory requirements for such orders.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows a person to apply for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods listed in section 269SJ, which are ineligible for a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. According to this section, a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively.
The Act imposes specific obligations on the CEO, such as the requirement to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The CEO must make a written order declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies if satisfied that the application meets the core criteria (subsection 269P(3)). Additionally, the Act ensures that the TCO does not affect the rights of a person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).
In terms of consequences for non-compliance, the Act does not explicitly detail offences, penalties, or civil/criminal consequences for breach. However, the Act ensures that the rights of importers will be beneficially affected, and under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. This implies that while specific penalties for breaches are not stated, the Act provides mechanisms for redress and ensures that the rights of parties involved are protected.