EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610660
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.
Danisco Australia Pty Ltd applied for a TCO in respect of certain food emulsifiers on 22 June 2006.
Instrument
TCO No 0610660 was made on 08 September 2006. It declares that those certain food emulsifiers 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. 0610660 is taken to have come into force on 22 June 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 Commonwealth Parliament, provides a framework for the administration of customs and excise duties in Australia. One of the mechanisms within this Act is the Tariff Concession Order (TCO) scheme, which allows for the application of lower rates of customs duty on specified goods. The Tariff Concession Instrument No. 0610660, enacted in 2006, addresses the problem of ensuring that certain goods which are not produced in Australia in the ordinary course of business can benefit from tariff concessions. This instrument was introduced to ensure that Australian businesses and consumers can access these goods at a reduced duty rate, thereby promoting economic efficiency and consumer choice. The policy objective of this instrument is to facilitate the importation of goods that are not domestically produced, thereby enhancing the competitiveness of Australian industries that rely on these imported inputs.
Scope and Application
The Tariff Concession Instrument No. 0610660 applies to any person or entity seeking a tariff concession order (TCO) for goods specified in the instrument, which in this case are certain food emulsifiers. This application of the Customs Act 1901 pertains specifically to those goods for which a TCO has been granted, allowing them to be imported at a reduced or free rate of customs duty as specified. The geographic and jurisdictional reach of this Act extends across the Commonwealth of Australia, governing the customs duties and concessions applicable nationally. The Act does not impose any liabilities on any person and does not affect the rights of any person except to the benefit of importers who can apply for a refund of duty. The CEO must ensure that the application for a TCO meets the core criteria, particularly that no substitutable goods are produced in Australia, and must publish a notice in the Gazette inviting submissions, although no submissions were received in this instance. The TCO is effective from the date the application was lodged, which was 22 June 2006, and does not disadvantage any person by imposing liabilities or affecting rights as at the date of registration concerning actions taken prior to this date.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0610660 are sections 269C, 269F, and 269P(3) of the Customs Act 1901 (section 269C). These sections establish the framework for the application and approval process of Tariff Concession Orders (TCOs). Section 269F permits an application to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, while section 269C details the core criteria that must be met for the CEO to consider making a TCO. Specifically, section 269C requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to the prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations on the CEO, who must evaluate applications for TCOs against the core criteria outlined in section 269C. Upon accepting a TCO application as valid, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the TCO if the application meets the criteria. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person, other than the Commonwealth, as at the date of registration (subsection 269S(1)).
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs could lead to civil or criminal consequences. While the explanatory statement does not specify exact penalties, breaches of the Customs Act can generally result in substantial fines and imprisonment, depending on the severity and intent behind the breach. For instance, knowingly making a false statement or representation in relation to a TCO application could attract a penalty of up to five years' imprisonment under section 274 of the Act. Furthermore, any person found to have intentionally contravened a provision of the Customs Act could be liable for a civil penalty of up to $22,200 per offence for individuals and $111,000 per offence for bodies corporate, as stipulated in section 284 of the Act.