EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0601600
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.
Tetra Pak Marketing Pty Ltd applied for a TCO in respect of certain ice confectionery ingredient feeders on 29 December 2005.
Instrument
TCO No 0601600 was made on 17 March 2006. It declares that those certain ice confectionery ingredient feeders 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. 0601600 is taken to have come into force on 29 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 Australian Parliament, provides a framework for the administration of customs and excise in Australia. Part XVA of this Act facilitates the establishment of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can lower the rate of customs duty on specific goods. This was introduced to address the problem of potentially higher customs duties on imported goods that do not have locally produced substitutes. The objective of this legislative framework, as evidenced in the explanatory statement, is to ensure that imported goods which cannot be substituted by locally produced goods are taxed in a manner that promotes fair competition and economic efficiency. Tariff Concession Instrument No. 0601600, made under this Act, provides a concrete example of how this mechanism operates, offering a duty-free rate on certain ice confectionery ingredient feeders based on the absence of substitutable goods produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0601600 under the Customs Act 1901 applies to individuals or entities that have made an application for tariff concessions in respect of specific goods, namely certain ice confectionery ingredient feeders in this case. The application was made by Tetra Pak Marketing Pty Ltd on 29 December 2005. The Act applies to these goods by way of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs, following satisfaction that the application meets the core criteria as outlined in section 269C of the Act, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This TCO, which came into effect on the date the application was lodged, specifies that these goods are subject to a zero rate of customs duty as opposed to the general rate of 5%. The geographic scope of this legislation is national, as it pertains to customs duties within Australia. There are no stated exclusions or exemptions in this specific TCO, but section 269SJ of the Act lists goods that cannot be subject to a TCO. The application of the Act may be further defined or restricted through subordinate instruments, but this particular TCO does not extend beyond its specified terms and conditions.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0601600 are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901, as well as the relevant parts of Schedule 4 of the Customs Tariff Act 1995. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods. The CEO must determine whether the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia at the time of application. If these criteria are met, section 269P(3) mandates that the CEO make a written TCO, declaring the goods to which the specified item of Schedule 4 applies. This TCO then grants a concession on the customs duty rate for the specified goods.
The obligations and requirements imposed by the Customs Act 1901 on the parties governed by this Act include the submission of a valid application by the applicant to the CEO. The applicant must ensure that the goods in question do not have substitutable alternatives produced in Australia, as per the core criteria in section 269C. The CEO, in turn, has the obligation to process the application and determine its validity based on the provided criteria. If the CEO is satisfied with the application, they must issue a TCO and publish a notice in the Gazette inviting submissions from any interested parties. Although no submissions were received in this instance, the CEO must still consider any legitimate submissions that may arise and act accordingly.
The Act also outlines the consequences for breaches or non-compliance. While specific offences and penalties are not detailed in the provided text, general provisions within the Customs Act 1901 address penalties for non-compliance with customs regulations. These penalties can include fines and, in more severe cases, imprisonment. The exact penalties would be determined by the specifics of the breach and would be in accordance with the applicable sections of the Customs Act 1901. Additionally, there are civil and criminal consequences for fraudulent activities or deliberate non-compliance, which could further include penalties under other relevant Australian legislation.