EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603283
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.
Food Processing Equipment Pty Ltd applied for a TCO in respect of certain meat separators on 3 February 2006.
Instrument
TCO No 0603283 was made on 7 April 2006. It declares that those certain meat separators 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 0%.
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. 0603283 is taken to have come into force on 3 February 2006.
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. 0603283, made under the Customs Act 1901, was introduced to provide a concession on customs duty for certain imported goods, specifically meat separators, in response to an application from Food Processing Equipment Pty Ltd. Enacted by the Chief Executive Officer of Customs, the instrument aims to reduce the duty on these goods from the general rate of 5% to 0%, effective from the date the application was lodged, 3 February 2006. This initiative was undertaken to ensure that Australian businesses could access necessary equipment without incurring high customs duties, provided that no substitutable goods were produced domestically. The decision followed a thorough evaluation process, which included a public consultation period during which no objections were received, thereby facilitating the concession as intended by the policy objectives outlined in the Customs Act.
Scope and Application
The Customs Act 1901, as amended, facilitates tariff concessions through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act applies to any person or entity that seeks to import goods eligible for a tariff concession, ensuring that these goods do not have substitutable equivalents produced domestically. The scope of the Act includes the entire Commonwealth of Australia, and its application is determined by specific criteria under sections 269C and 269D, which focus on the absence of substitutable goods produced in Australia. Exemptions and exclusions are defined under section 269SJ, which lists goods ineligible for tariff concessions. Subordinate instruments may extend or further clarify the application of the Act, though the primary legislation outlines the fundamental principles and criteria for TCOs.
Key Provisions
The key operative sections of the Customs Act 1901, as applied through the Tariff Concession Order No. 0603283, establish a framework for reducing customs duty on certain goods. Specifically, section 269F allows for an application to be made to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO) in respect of goods. If the CEO determines that the application complies with the core criteria, they are required under section 269C to issue a TCO, provided no substitutable goods were produced in Australia on the date the application was lodged. Section 269P(3) further mandates that a written order must be issued, specifying the reduced duty rate applicable to the goods in question.
The Act imposes several obligations on the parties it governs. Firstly, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties when a TCO application is accepted as valid. However, the CEO is also required to evaluate the application against the core criteria set out in section 269C. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken prior to the TCO's registration (subsection 269S(1)).
In terms of consequences for non-compliance, the Act does not explicitly outline offences or penalties for breaches related to the TCO process itself. However, the potential for civil or criminal liability may arise if the CEO fails to adhere to the statutory requirements or if there is fraudulent behaviour in the application process. Penalties for such breaches would depend on the specific nature of the non-compliance and the relevant provisions of the Customs Act or other applicable legislation. For example, any fraudulent application could result in criminal penalties as per the Commonwealth Criminal Code Act 1995.