EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610661
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 0610661 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. 0610661 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 Parliament of Australia, provides a framework for the imposition of customs duties on imported goods. To address specific economic needs and to encourage trade, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can reduce or eliminate customs duty on certain goods, provided they meet specified criteria. TCO No. 0610661, introduced on 8 September 2006, applies to certain food emulsifiers, reducing their duty from 5% to free, effective from 22 June 2006, the date the application was lodged. This measure was introduced to assist importers of these specific goods by lowering their costs, thus potentially increasing their competitiveness in the market. The policy objective is to support the importation of goods that are not produced domestically, thereby fostering economic growth and trade.
Scope and Application
The Tariff Concession Instrument No. 0610661, made under the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO) as determined by the Chief Executive Officer of Customs. This instrument specifically addresses the application by Danisco Australia Pty Ltd for certain food emulsifiers, which were granted a concession that effectively sets their customs duty rate to free, as opposed to the general rate of 5%. The scope of the Act encompasses any person or entity that can apply for such tariff concessions, provided that the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The geographic reach of this legislation is national, as it is governed by Commonwealth law. The Act allows for the expansion or restriction of its application through subordinate instruments, such as the specific TCOs, which must adhere to the criteria outlined in section 269C of the Act. There are no stated exclusions or exemptions within the TCO itself, but the Act ensures that the rights of non-Commonwealth persons are not adversely affected by the concession.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0610661, which amends the Customs Act 1901, include sections 269C, 269F, and 269P(3). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application is deemed not to relate to goods specified in section 269SJ and meets the core criteria set out in section 269C, the CEO must make a written order (section 269P(3)) declaring that the goods are subject to a lower rate of customs duty, as specified in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved include the requirement for applicants to ensure their applications meet the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO is obligated to publish a notice in the Gazette inviting submissions if the application is accepted as valid (subsection 269K(1)), although in this case, no submissions were received. Furthermore, the CEO must make a TCO if the application meets the criteria (subsection 269P(3)). The Act also stipulates that a TCO comes into force on the day the application is lodged (subsection 269S(1)).
In terms of penalties and consequences for breaches, the Customs Act 1901 does not specify explicit penalties for failing to comply with the provisions related to TCOs. However, any failure to meet the criteria for a TCO or any misrepresentation in the application process could result in the application being rejected. Moreover, importing goods subject to a TCO without proper documentation or in breach of the terms could lead to the imposition of full customs duty rates and potential fines or legal action for non-compliance with customs regulations. The severity of penalties for such breaches would depend on the specific circumstances and the extent of the non-compliance.