EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606172
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 curd coagulators on 31 March 2006.
Instrument
TCO No 0606172 was made on 25 June 2006. It declares that those certain cheese curd coagulators 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. 0606172 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. 0606172, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for specific imported goods where no substitutable goods are produced in Australia. This legislative instrument allows the Chief Executive Officer of Customs to issue a Tariff Concession Order (TCO) that reduces the customs duty on certain goods, thereby facilitating more affordable access to these items for Australian consumers and businesses. The objective of this particular instrument was to provide a 0% duty rate on certain cheese curd coagulators, which was achieved by applying item 50 of Schedule 4 to the Customs Tariff Act 1995. This concession was made in response to an application by Richard Karl Hill, following a determination that no substitutable goods were being produced domestically. The instrument aims to promote economic efficiency by ensuring that Australian importers and consumers have access to competitively priced goods, without imposing any new liabilities or disadvantaging existing stakeholders.
Scope and Application
The Customs Act 1901 provides a framework for the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying lower rates of customs duty to certain goods. The Act applies to individuals and entities that apply for a TCO concerning goods not specified in section 269SJ, which includes goods that cannot be subject to a TCO. The geographic reach of the Act is national, as it applies across Australia and is overseen by the Commonwealth. The application process involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The TCOs extend to reduce the duty rate on specific goods, such as the cheese curd coagulators mentioned, from a general rate of 5% to 0%. There are no exemptions or exclusions specified in this particular TCO, although the Act allows for potential consultations and submissions which, in this case, did not result in any objections. The commencement date of the TCO is the date the application was lodged, 31 March 2006, and it does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269P(3), and 269SJ of the Customs Act 1901, which provide the framework for Tariff Concession Orders (TCOs) and the conditions under which they may be applied for and granted. Specifically, section 269F allows a person to apply for a TCO, while section 269C stipulates the core criteria that the Chief Executive Officer of Customs (CEO) must be satisfied with before making such an order. Section 269P(3) then mandates that the CEO must issue a written order if the application meets these criteria, and section 269SJ outlines the types of goods that cannot be subject to a TCO. Under this instrument, certain cheese curd coagulators have been granted a tariff concession, reducing their duty from 5% to 0%.
The Customs Act 1901 imposes specific obligations on both applicants and the CEO in relation to TCOs. For applicants, this means ensuring that their application is not for goods specified in section 269SJ and that the application meets the core criteria outlined in section 269C. The CEO, on the other hand, must verify that the application is valid and meets the core criteria before making a TCO. The CEO is also required to publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made, as stipulated in subsection 269K(1). In this case, the CEO did not receive any submissions in response to the published notice.
Breaching the conditions set forth in the Customs Act 1901 or the associated regulations can result in various consequences. While specific offences and penalties are not detailed in the explanatory statement, general provisions within the Act likely apply. These could include civil penalties for non-compliance with the tariff concession provisions, or criminal penalties for more serious breaches. The maximum penalties for such offences would be determined according to the severity of the breach and the specific sections of the Act or associated regulations that are contravened. The TCO itself does not impose any new liabilities on persons other than the Commonwealth, nor does it affect any existing rights or liabilities accrued before its registration.