EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516796
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.
H&K Restaurant Systems Ltd applied for a TCO in respect of certain meal preparation line on 16 December 2005.
Instrument
TCO No 0516796 was made on 10 March 2006. It declares that those certain meal preparation line 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. 0516796 is taken to have come into force on 16 December 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 Parliament of Australia, was amended to introduce a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs (CEO). The purpose of this legislative intervention was to address the gap in providing reduced customs duty rates for specific goods, thereby facilitating trade and economic growth by making imported goods more affordable. This mechanism allows for a more competitive market by potentially lowering the cost of imported goods, provided they meet the stipulated criteria and no substitutable goods are produced domestically. The policy objective behind the Tariff Concession Orders is to support industries by reducing the cost of imported goods, which in turn can lead to broader economic benefits such as increased consumer choice and potentially lower prices for end consumers. Instrument TCO No. 0516796 exemplifies this by granting a tariff concession for certain meal preparation lines, reducing their duty rate to free, which would otherwise stand at 5%.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the procedures for making Tariff Concession Orders (TCOs) which grant lower rates of customs duty on specified goods. The Act applies to any person or entity that may apply for such concessions provided that the goods in question are not listed in section 269SJ as ineligible. The geographic reach of this legislation is national, as it pertains to goods entering Australia. The Act mandates that before a TCO can be made, the Chief Executive Officer of Customs (CEO) must be satisfied that the application meets the core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. Section 269C stipulates that if these criteria are met, the CEO must issue a TCO, which was the case for H&K Restaurant Systems Ltd in 2005 for certain meal preparation lines, resulting in a duty-free entry for these goods. The application of the TCO begins on the date the application is lodged, in this instance, 16 December 2005, without retroactive disadvantage to any person other than the Commonwealth. The TCO also allows for the refund of duties paid on these goods imported since the effective date of the concession, benefiting importers under the Customs Regulations 1993.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0516796 under the Customs Act 1901 (section 269F) permit the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) for goods upon application. If the CEO is satisfied that the application meets the core criteria, they must issue a TCO, as specified in section 269P(3). This particular TCO, No. 0516796, pertains to certain meal preparation lines and specifies that these goods are subject to a rate of duty as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively granting them a free rate of duty.
The Act imposes several obligations on the parties involved. The CEO is mandated to ensure that the application for a TCO is not in respect of goods specified in section 269SJ, which are ineligible for such concessions. The CEO must also verify that the application meets the core criteria outlined in section 269C, which includes confirming that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, as per section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed.
In terms of consequences for non-compliance, the Act does not explicitly list offences or penalties related to breaches of TCOs. However, any failure to comply with the requirements of the Customs Act 1901 could potentially lead to legal actions, including administrative penalties or sanctions as prescribed by other relevant legislation. The Act ensures that the rights of importers are protected and that they can apply for duty refunds on goods imported since the date the TCO is deemed to have come into force, without incurring any additional liabilities.
The TCO, as declared under section 269S(1), is effective from the date the application was lodged, which in this case is 16 December 2005. Importantly, the TCO does not adversely affect the rights of any person (other than the Commonwealth) as at the date of registration nor impose any liabilities on such persons in respect of actions taken prior to the registration date. This ensures that importers of the specified goods are the primary beneficiaries of the duty concessions provided by this TCO.