EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604623
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.
Avem Pty Ltd applied for a TCO in respect of certain dough proving and conditioning cabinets on 1 March 2006.
Instrument
TCO No 0604623 was made on 12 May 2006. It declares that those certain dough proving and conditioning cabinets 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. 0604623 is taken to have come into force on 1 March 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. 0604623 was enacted in 2006 under the Customs Act 1901 to provide relief for certain imported goods by applying a reduced rate of customs duty. This instrument was developed in response to the need to facilitate the import of goods that are not produced domestically, thus supporting industries reliant on such imports. The instrument was introduced by the Chief Executive Officer of Customs, who assessed the application from Avem Pty Ltd for tariff concessions on certain dough proving and conditioning cabinets. The policy objective of this legislation is to ensure that no substitutable goods were produced in Australia at the time of application, thereby reducing the duty from the general rate of 5% to free.
The Customs Act 1901, enacted by the Australian Parliament, provides a framework through which tariff concession orders can be made, aiming to promote fair trade practices by ensuring that the Australian market is not burdened with unnecessary tariffs on imported goods that are not locally produced. This particular instrument was issued after the CEO was satisfied that the application met the core criteria, and it came into effect on the date the application was lodged, 1 March 2006. Importantly, it does not affect the rights of any person except to beneficially impact the rights of importers who can now apply for a refund of duty on imported goods since the instrument's effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to lower the customs duty on certain goods. This Act applies to any person or entity that seeks a TCO for goods, provided the application does not pertain to goods explicitly excluded under section 269SJ of the Act. The process entails submitting an application to the CEO, who evaluates whether the application meets the core criteria, primarily the absence of substitutable goods produced in Australia. Once the CEO determines that the core criteria are met, a TCO is issued, reducing the customs duty on the specified goods. The instrument’s geographic reach is national, operating under the framework of the Customs Act 1901 at the Commonwealth level. The application of the Act is further refined through Schedule 4 to the Customs Tariff Act 1995, which details the specific rates of duty applicable to the goods. Subordinate instruments may extend or further define the application of the Act, ensuring flexibility in the administration of tariff concessions.
Key Provisions
The Tariff Concession Order (TCO) No. 0604623 under the Customs Act 1901 (the Act) sets forth the specific provisions concerning a concession on customs duty for certain dough proving and conditioning cabinets. This order was made on 12 May 2006 and is effective as of 1 March 2006, the date the application for the TCO was lodged (section 269S(1)). The key aspect of this order is that it declares these particular cabinets as goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free, as opposed to the general rate of 5% (subsection 269P(3)).
Under the Act, specific obligations are placed on both applicants and the Chief Executive Officer of Customs (CEO). For applicants, the primary requirement is to ensure that their application for a TCO is made in accordance with the criteria stipulated in section 269C of the Act. This means that the applicant must demonstrate that, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business (section 269C). Once an application is accepted, the CEO is required to publish a notice in the Gazette inviting any interested party to lodge submissions if they believe there are reasons why the TCO should not be made (subsection 269K(1)). If the CEO determines that the application meets the core criteria, a written TCO is issued (subsection 269P(3)).
The Act also delineates consequences for non-compliance or breaches related to the TCO process. Although the specific penalties for breaches are not detailed within the explanatory statement, it is pertinent to note that the Customs Act 1901 includes provisions for both civil and criminal penalties for various types of non-compliance. Typically, these may include fines, imprisonment, or both, depending on the severity and nature of the breach. The exact penalties would be in accordance with the broader framework established by the Customs Act and associated regulations.
Additionally, the explanatory statement clarifies that the TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken prior to the TCO’s registration. Importers, however, stand to benefit from this order as they can apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). This aspect ensures that the rights of importers are preserved and potentially enhanced, without any retrospective liabilities being imposed.