EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604144
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.
Simplot Australia Pty Ltd applied for a TCO in respect of certain frozen fish blocks sawing line on 20 February 2006.
Instrument
TCO No 0604144 was made on 5 May 2006. It declares that those certain frozen fish blocks sawing 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 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. 0604144 is taken to have come into force on 20 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. 0604144, enacted in 2006, amends the Customs Act 1901 to provide tariff concessions on certain frozen fish blocks sawing line. This legislative instrument addresses the gap in the tariff structure that could potentially disadvantage Australian importers by imposing higher customs duties on specific goods. The instrument was introduced by the Chief Executive Officer of Customs, acting under the authority delegated by the Parliament of Australia. The policy objective of this instrument is to ensure that Australian importers of specified goods are not subjected to tariffs that could hinder their competitiveness, thereby supporting the broader economic policy of fostering fair trade practices and reducing unnecessary costs on imported goods.
The instrument was developed following an application by Simplot Australia Pty Ltd, which sought a tariff concession for their frozen fish blocks sawing line. The CEO of Customs evaluated the application and found that no substitutable goods were produced in Australia, thus satisfying the core criteria outlined in the Customs Act 1901. Consequently, the CEO issued Tariff Concession Order No. 0604144, which reduced the duty on these goods from 5% to 0%, effective from the date the application was lodged, 20 February 2006. This order was published in the Gazette with an invitation for public submissions, though none were received. The order ensures that the rights of importers are protected and can benefit from a refund of duties paid on imports since the effective date of the concession.
Scope and Application
The Customs Act 1901, through Part XVA, governs the creation and application of Tariff Concession Orders (TCOs), which provide for reduced rates of customs duty on specific goods. The Act applies to any person or entity that may apply for a TCO, as well as to the goods themselves, provided they meet the criteria set out in the Act. The application process is overseen by the Chief Executive Officer of Customs, who determines whether the application for a TCO meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it applies across Australia and affects the importation of goods into the country. There are exclusions, such as the goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of the Act may be further defined through subordinate instruments, although the primary legislation itself sets out the fundamental criteria and processes. The Tariff Concession Instrument No. 0604144, for instance, was made under this framework and specifies that certain frozen fish blocks sawing line are subject to a 0% duty rate instead of the general 5% rate.
Key Provisions
The Tariff Concession Instrument No. 0604144, made under section 269F of the Customs Act 1901, pertains to a specific set of frozen fish blocks sawing line. Pursuant to this instrument, a lower rate of customs duty applies to these goods, effectively reducing the duty from the general rate of 5% to 0%. The primary operative sections relevant to this TCO include sections 269F, 269C, and 269P of the Customs Act 1901, which outline the process for applying for, assessing, and making a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business, the CEO must make a written TCO (section 269P).
The obligations imposed by the Act on parties or entities include the requirement for the CEO to carefully assess whether a TCO application meets the core criteria set out in sections 269C and 269D. This involves determining whether substitutable goods are being produced in Australia and ensuring that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to submit a response. This process ensures transparency and provides an opportunity for stakeholders to voice any objections.
Should any party or entity fail to comply with the provisions of the Customs Act 1901 concerning the making and enforcement of TCOs, they may face legal consequences. Although the explanatory statement does not detail specific offences or penalties for breaches of the Act, it is understood that breaches of the Act can lead to civil or criminal penalties. The severity of these penalties can vary depending on the nature and extent of the breach, with potential consequences including fines or other sanctions as prescribed by the relevant legislation. It is imperative for all parties to adhere to the requirements set forth by the Act to avoid any legal repercussions.