EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604394
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 flour coating line on 27 February 2006.
Instrument
TCO No 0604394 was made on 5 May 2006. It declares that those certain flour coating 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. 0604394 is taken to have come into force on 27 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, provides a framework for the administration of customs and excise duties, including the ability to grant tariff concessions. Specifically, Part XVA of the Act outlines the process for making Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The purpose of this legislation is to address the need for reducing customs duty on certain imported goods to stimulate economic activity or support industries that lack local production capabilities. The Tariff Concession Instrument No. 0604394, introduced on 5 May 2006, is an example of this process, where the CEO granted a concession for certain flour coating lines imported by Simplot Australia Pty Ltd, reducing their duty from 5% to 0%. This concession was made after it was determined that no substitutable goods were produced in Australia at the time of the application, satisfying the core criteria under section 269C of the Act. The TCO came into force on the date the application was lodged, 27 February 2006, without affecting the rights of any person or imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0604394 applies to the concession of customs duty rates on specific goods, as outlined in the Customs Act 1901. This instrument is particularly relevant to those entities that import the specified goods, namely flour coating lines, and provides them with a reduced customs duty rate as per the order. The Act applies on a Commonwealth level and involves the interaction between the Chief Executive Officer of Customs and the applicant, Simplot Australia Pty Ltd. The scope of the Act extends to ensuring that the imported goods for which the concession is sought do not have substitutable goods produced in Australia, as per the criteria set forth in the Customs Act 1901. The geographic reach of the Act is national, impacting importers across Australia who deal with the specified goods. Any exclusions or exemptions are detailed within the Act itself, with specific reference to section 269SJ, which lists goods ineligible for tariff concessions. The Act also allows for the extension or restriction of its application through subordinate instruments, which are to be interpreted in the context of the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The key operative sections of the Customs Act 1901, as applied through Tariff Concession Order No. 0604394, include section 269F which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C stipulates the core criteria that the CEO must satisfy before granting the TCO, specifically that no substitutable goods were produced in Australia on the day the application was lodged. If these conditions are met, the CEO is required to make a written order under section 269P(3), declaring that the goods specified in the TCO application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a reduced rate of duty.
The Act imposes several obligations on the parties involved. Firstly, the applicant must ensure their application meets the core criteria specified in section 269C, which includes demonstrating that no substitutable goods were produced in Australia. The CEO, on receiving a valid application, must publish a notice in the Gazette inviting submissions from any interested parties, as required by subsection 269K(1). The CEO must then consider any submissions received and decide whether to grant the TCO. If the CEO determines that the application meets the criteria, they must issue a written TCO under section 269P(3).
Failure to comply with the provisions of the Customs Act 1901 and the associated TCO can lead to various consequences. While the Explanatory Statement does not detail specific offences or penalties, breaches of customs laws generally can result in civil or criminal penalties. Civil penalties may include fines, and in some cases, criminal penalties could apply, leading to imprisonment depending on the severity of the breach. Additionally, the Act ensures that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, so as to disadvantage that person or impose liabilities for actions taken before the TCO was registered.