EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610665
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 0610665 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. 0610665 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 Australian Parliament, provides a framework for the imposition of customs duties on imported goods. Within this framework, Part XVA introduces a mechanism for Tariff Concession Orders (TCOs) that can reduce the rate of customs duty on certain goods. The Tariff Concession Instrument No. 0610665, introduced in 2006, addresses the need to grant tariff concessions for specific goods when there are no substitutable goods produced in Australia. This instrument was made under the authority of the Chief Executive Officer of Customs, who must determine whether an application for a TCO meets the core criteria set out in the Act. In this instance, the application from Danisco Australia Pty Ltd for certain food emulsifiers was approved, leading to a concession that reduced the duty rate from 5% to free, effective from the date of application, 22 June 2006. The policy objective is to facilitate the importation of goods that cannot be substituted by Australian-produced alternatives, thereby potentially benefiting importers and the broader market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on certain goods. This mechanism applies to any person who makes an application to the CEO for a TCO in relation to goods not specified in section 269SJ of the Act. An application is deemed to meet the core criteria if, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The TCO instrument, such as TCO No. 0610665, which was made in relation to certain food emulsifiers, applies free of duty once the CEO is satisfied with the application, provided no objections are lodged within the prescribed timeframe. The TCO applies nationwide and does not disadvantage any person or impose new liabilities on them. The CEO must publish a notice in the Gazette inviting submissions on the application, although in this instance, no submissions were received. The TCO takes effect from the date the application was lodged, offering importers the potential for duty refunds on goods imported since that date.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application of Tariff Concession Orders (TCOs) by individuals or entities to the Chief Executive Officer of Customs (CEO). If an application for a TCO is submitted for goods not specified in section 269SJ, which lists goods ineligible for a TCO, the CEO must determine if the application meets the core criteria (section 269C). A TCO application meets these criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If satisfied, the CEO must issue a written TCO declaring the goods to which a specified item in Schedule 4 of the Customs Tariff Act 1995 applies (section 269P(3)). In this case, TCO No. 0610665, made on 8 September 2006, applies to certain food emulsifiers under item 50 of Schedule 4, with the duty rate reduced from the general 5% to free.
The Act imposes obligations on both the applicant and the CEO. For the applicant, the requirement is to submit a valid application that meets the core criteria and avoids the ineligible goods specified in section 269SJ. The CEO, on receiving a valid application, must assess it against the core criteria and, if satisfied, issue a TCO. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties regarding the proposed TCO (subsection 269K(1)). In this instance, no submissions were received by the CEO, which streamlined the process of issuing the TCO.
Failure to comply with the requirements or obligations set out in the Customs Act 1901 may result in penalties or legal consequences. Although the explanatory statement does not detail specific penalties, breaches of customs regulations generally may incur civil or criminal penalties depending on the severity of the offence. Civil penalties can include fines, while criminal penalties may involve imprisonment. However, the specific penalties for non-compliance with TCO provisions are not elaborated in the provided text. Nonetheless, the Act ensures that the TCO does not disadvantage any person or impose liabilities for actions taken prior to the TCO's effective date, thus protecting the rights of importers who can apply for duty refunds under regulation 126(1)(r).