EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611313
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.
McCain Foods (Aust) Pty Ltd applied for a TCO in respect of certain food formers and portioners on 6 July 2006.
Instrument
TCO No 0611313 was made on 22 September 2006. It declares that those certain food formers and portioners 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. 0611313 is taken to have come into force on 6 July 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 administration of customs and excise duties, including provisions for Tariff Concession Orders (TCOs). These orders, issued by the Chief Executive Officer of Customs, aim to provide relief from customs duty on certain goods under specific circumstances, as outlined in Part XVA of the Act. The problem or gap this legislation addresses is the potential economic disadvantage faced by Australian businesses that cannot domestically produce goods that are subject to customs duty, thereby encouraging competitiveness and efficiency within the Australian market. Tariff Concession Instrument No. 0611313 was introduced to provide a tariff concession for McCain Foods (Aust) Pty Ltd's application concerning food formers and portioners, reducing the customs duty from 5% to 0%. This instrument was made in accordance with the provisions set out in the Customs Act 1901 and the Customs Tariff Act 1995, ensuring no adverse effect on rights or liabilities predating the instrument's registration.
Scope and Application
The Tariff Concession Instrument No. 0611313, made under the Customs Act 1901, applies to certain food formers and portioners specified in the instrument, allowing for a concession in customs duty rates. This instrument is relevant to any entity or individual importing these specific goods into Australia, as it grants them a zero percent duty rate under the Customs Tariff Act 1995, as opposed to the general rate of 5 percent. The application of this concession is contingent upon the condition that no substitutable goods are produced in Australia at the time of the application, a requirement stipulated in the Customs Act. The instrument is effective from the date of the application, 6 July 2006, and it does not affect any pre-existing rights or impose liabilities on individuals or entities except the Commonwealth. The scope of this legislation is specifically focused on the designated goods and their importation into Australia, with no public submissions opposing the concession at the time of its publication. The application of this concession may be further defined or extended through subordinate instruments, as permitted by the Customs Act.
Key Provisions
The main operative sections of this legislation include section 269C, which outlines the core criteria that must be met for an application for a Tariff Concession Order (TCO) to be approved by the Chief Executive Officer (CEO) of Customs. According to section 269C, an application for a TCO will be approved if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D and section 269E). If the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to make a written order (a TCO) that declares that the goods subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations and requirements imposed by this Act on the parties it governs are that an applicant must satisfy the CEO that the application for a TCO meets the core criteria set out in section 269C of the Act. If the CEO is satisfied that the application meets the core criteria, the CEO must make a written order (a TCO) that declares that the goods subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO.
Any breach of this legislation may result in civil or criminal consequences, although the explanatory statement does not specify the exact nature of these consequences. However, the statement does note that the TCO does not impose any liabilities on any person, and that the rights of importers will be beneficially affected. If the CEO is not satisfied that an application for a TCO meets the core criteria, the application will not be approved, and the applicant will not receive any tariff concessions for the goods in question. The maximum penalty for any breaches of this legislation is not specified in the explanatory statement.