EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603731
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.
Mrs Macs Pty Ltd applied for a TCO in respect of a certain pie production line on 12 February 2006.
Instrument
TCO No 0603731 was made on 12 May 2006. It declares that those certain pie production line are is a 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. 0603731 is taken to have come into force on 14 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 Customs Act 1901, enacted by the Australian Parliament, serves as a fundamental piece of legislation governing customs duties and related activities within Australia. Specifically, Part XVA of the Act provides the framework for Tariff Concession Orders (TCOs), which are designed to lower the rate of customs duty on certain imported goods under particular conditions. This legislative tool was introduced to address the gap in providing tariff relief to businesses that import goods for which no Australian-made alternatives exist, thus encouraging the import of specific goods that are not domestically produced. The explanatory statement indicates that the Tariff Concession Instrument No. 0603731 was enacted to address an application from Mrs Macs Pty Ltd for a tariff concession on a certain pie production line. The primary policy objective is to ensure that businesses can access necessary imported goods at a reduced customs duty rate, thereby supporting economic activities that rely on these imports.
Scope and Application
The Tariff Concession Instrument No. 0603731, made under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been issued by the Chief Executive Officer of Customs. The legislation pertains to the concession of customs duty on certain pie production line equipment, specifically item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act applies to any person or entity seeking to import the specified goods, with the TCO providing a reduced or free rate of customs duty, provided no substitutable goods are produced in Australia. This concession is effective from the date the TCO application was lodged, 14 February 2006, and does not retroactively affect the rights or liabilities of any person other than the Commonwealth. Importers of the concessioned goods are entitled to apply for a refund of duty paid on those goods since the effective date of the TCO.
Key Provisions
The Customs Act 1901 establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) through section 269F. When an applicant submits an application for a TCO in respect of goods, as outlined in section 269F, the CEO must first determine if the application concerns goods specified in section 269SJ, which are ineligible for a TCO. If the goods are not listed in section 269SJ, the CEO then assesses whether the application meets the core criteria set out in section 269C. These criteria include verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, with definitions provided in sections 269D and 269E for 'goods produced in Australia' and 'ordinary course of business', and in section 269F for 'substitutable goods'.
Upon satisfying these criteria, the CEO is required under subsection 269P(3) to make a written order, the Tariff Concession Order (TCO), which specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. This effectively lowers the customs duty rate for these goods, potentially to zero, as seen in TCO No. 0603731, which applies to a certain pie production line, setting the duty rate at free instead of the general rate of 5%.
The Act imposes specific obligations on the CEO, including the publication of a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit reasons why the TCO should not be granted, as per subsection 269K(1). However, in the case of TCO No. 0603731, no submissions were received. The Act also mandates that the TCO comes into force on the day the application was lodged, as per subsection 269S(1), ensuring the rights of persons other than the Commonwealth are not disadvantaged. This means that while importers can benefit from duty refunds for goods imported since the TCO came into force, no new liabilities are imposed on any person.
In terms of consequences for breaches of the provisions set out in the Customs Act 1901, the explanatory statement does not detail specific offences or penalties. However, general provisions within the Act likely apply, where unauthorised activities, such as the importation of goods without the appropriate TCO, could lead to civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach and the relevant sections of the Act or associated regulations.