EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515972
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 extruders on 14 November 2005.
Instrument
TCO No 0515972 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. 0515972 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. 0515972, enacted in 2006, amends the Customs Act 1901 to provide tariff concessions for specific goods, addressing the need for facilitating the importation of certain products that are not produced domestically. This legislative instrument was introduced by the Chief Executive Officer of Customs, in line with the provisions of section 269F of the Customs Act 1901. The policy objective underpinning this instrument is to encourage the importation of goods that are not substitutable by Australian-produced alternatives, thereby potentially reducing costs for businesses and consumers while promoting economic efficiency. The instrument specifies a lower customs duty rate for certain confectionery extruders, effectively reducing the duty from the general rate of 5% to free, in response to an application by Goodman Fielder Consumer Foods Pty Ltd, with no objections received during the consultation period.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0515972, pertains to the application of Tariff Concession Orders (TCOs) for specific goods, allowing for a reduction in customs duty. The Act applies to entities or individuals who seek a reduction in customs duty for goods by applying for a TCO under section 269F, provided the goods are not specified in section 269SJ and meet the criteria outlined in section 269C. The scope of this legislation is national, operating within the Commonwealth of Australia and affecting all states and territories. The application of the Act extends through subordinate instruments, which may further define the specifics of tariff concessions, substitutable goods, and the process for making TCO applications. Notably, the Act does not disadvantage any person by affecting their rights as they stood before the date of registration of a TCO, nor does it impose liabilities on persons other than the Commonwealth for actions taken prior to the TCO's effective date. The rights of importers are positively impacted as they may apply for a refund of duty on goods imported since the TCO's effective date under the Customs Regulations.
Key Provisions
The Tariff Concession Instrument No. 0515972, made under section 269F of the Customs Act 1901, outlines the process and criteria for granting a Tariff Concession Order (TCO) for certain confectionery extruders. The CEO of Customs must make a written order declaring that specific confectionery cooking lines are subject to a zero rate of duty as item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, provided that no substitutable goods were produced in Australia on the day the application was lodged (sections 269C and 269P(3)). The general rate of duty on these goods is 5%, but the TCO sets it to free. This instrument came into force on the date the application was lodged, 14 November 2005 (subsection 269S(1)).
The Act imposes specific obligations on applicants and the CEO regarding the TCO process. The applicant must ensure that their application for a TCO meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the application date (section 269C). The CEO, upon receiving an application, must decide whether the application meets the core criteria and, if satisfied, make a TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to lodge submissions (subsection 269K(1)). In this case, no submissions were received in response to the notice.
Failure to comply with the requirements set out in the Customs Act 1901 can result in various consequences. If an entity fails to meet the core criteria for a TCO, the CEO may not grant the TCO, leading to continued imposition of the standard duty rate. While the Act does not specify penalties for non-compliance, breaches of related customs regulations can result in substantial fines and other penalties under the Customs Act and associated regulations. For example, penalties for false statements or fraudulent conduct in relation to customs matters can include fines of up to $22,200 for individuals and $111,000 for corporations, as per section 236 of the Customs Act.