EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606161
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.
Richard Karl Hill applied for a TCO in respect of certain cheese mould filling and stacking and/or destacking lines on 31 March 2006.
Instrument
TCO No 0606161 was made on 26 June 2006. It declares that those certain cheese mould filling and stacking and/or destacking lines 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. 0606161 is taken to have come into force on 31 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. 0606161 was enacted in 2006 as a response to a specific application for tariff concession under the Customs Act 1901. This Act, enacted by the Australian Parliament, provides a framework for the imposition of tariffs and the granting of concessions. The Tariff Concession Instrument was designed to address the gap in the duty-free importation of certain cheese mould filling and stacking and/or destacking lines by reducing the applicable customs duty from the general rate of 5% to 0% for these goods. The policy objective behind this concession is to support industries that rely on imported goods by lowering the cost of these imports, thereby promoting economic efficiency and competitiveness.
The Chief Executive Officer of Customs (CEO) was satisfied that the application met the core criteria outlined in section 269C of the Act, which stipulates that no substitutable goods were produced in Australia in the ordinary course of business. Following the application by Richard Karl Hill on 31 March 2006, and after no objections were received in response to a Gazette notice, the CEO issued Tariff Concession Order No. 0606161 on 26 June 2006, effectively granting the requested tariff concession. This concession applies retroactively from the date of the application, and while it does not affect pre-existing rights or impose liabilities, it does allow for duty refunds for importers of these goods under the Customs Act.
Scope and Application
The Tariff Concession Instrument No. 0606161, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain cheese mould filling and stacking and/or destacking lines. The Act allows for the application of lower rates of customs duty on goods subject to a Tariff Concession Order (TCO), provided the goods meet the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia in the ordinary course of business. This instrument extends to the entire Commonwealth of Australia, governing the importation and customs duties applicable to these specific goods. While the Act provides for the creation of TCOs, it also excludes certain goods from being subject to these orders, as specified in section 269SJ of the Act. Additionally, the Act allows for the scope of TCOs to be extended or restricted through subordinate instruments. In this instance, the Tariff Concession Order No. 0606161 was made effective from 31 March 2006, with no adverse effects on pre-existing rights or liabilities.
Key Provisions
The Tariff Concession Instrument No. 0606161, which is made under the Customs Act 1901, primarily focuses on the concession of tariff rates for certain goods. The operative sections of this instrument, particularly section 269C, state that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The instrument declares that the goods in question—certain cheese mould filling and stacking and/or destacking lines—are subject to a zero percent duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This contrasts with the general rate of 5% duty on similar goods.
The Customs Act 1901 imposes several obligations on parties involved with the TCO process. The Chief Executive Officer of Customs (CEO) is responsible for determining whether an application meets the core criteria, as specified in section 269C, and subsequently making a TCO if the criteria are satisfied. The CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as outlined in subsection 269K(1). In this case, no submissions were received, allowing the TCO to proceed. Importers, who are directly affected by the TCO, have the right to apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations can result in various civil and criminal consequences. While the Explanatory Statement does not specify particular offences or penalties, breaches of customs laws can generally lead to fines, penalties, and in severe cases, criminal charges. The maximum penalties for customs offences can vary, but they often include substantial fines and, in some instances, imprisonment, depending on the severity of the breach. The TCO itself does not impose any liabilities on any person, ensuring that only the intended beneficiaries, such as importers, are positively affected.