EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611861
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.
Cadbury Schweppes Pty Ltd applied for a TCO in respect of certain caramel cookers on 14 July 2006.
Instrument
TCO No 0611861 was made on 29 September 2006. It declares that those certain caramel cookers 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. 0611861 is taken to have come into force on 14 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 Tariff Concession Instrument No. 0611861 was enacted in 2006 under the Customs Act 1901 to provide a concessional rate of customs duty for certain caramel cookers, addressing a gap in the existing tariff scheme by providing tariff relief where no substitutable goods were produced in Australia. This instrument was introduced to ensure that the application process for tariff concessions is both transparent and accessible, thereby facilitating trade and benefiting importers. The instrument was created by the Chief Executive Officer of Customs in accordance with section 269F of the Act, following an application by Cadbury Schweppes Pty Ltd, and was designed to ensure that no Australian-produced goods were capable of substituting the imported items in question. The policy objective is to support the importation of goods that are not locally produced, thereby encouraging trade and potentially reducing costs for importers.
Scope and Application
The Tariff Concession Instrument No. 0611861, made under the Customs Act 1901, applies to individuals or entities that are seeking tariff concessions for specific goods imported into Australia. The instrument is issued by the Chief Executive Officer of Customs (CEO) and pertains to the application process for Tariff Concession Orders (TCOs) for goods not produced in Australia. This instrument particularly concerns Cadbury Schweppes Pty Ltd's application for certain caramel cookers, declaring them eligible for a tariff concession as no substitutable goods were produced in Australia. The application process and the instrument's provisions are in line with the requirements set out in sections 269C, 269B, and 269P of the Customs Act 1901, ensuring that the application meets core criteria and is published in the Gazette for public consultation. The instrument extends its jurisdictional reach nationally within Australia, affecting the rights of importers beneficially by allowing them to apply for a refund of duty on goods imported since the day the TCO came into force. The Act does not disadvantage or impose liabilities on any person other than the Commonwealth concerning actions taken before the registration date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0611861 under the Customs Act 1901 (section 269F) establish the process for applying for a Tariff Concession Order (TCO). Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must assess whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If these criteria are satisfied, the CEO is required to make a written order (TCO) stating that the goods in question are subject to a prescribed tariff item (section 269P(3)). In this instance, the TCO No. 0611861 declares that certain caramel cookers are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general 5%.
The Act imposes several obligations and requirements on both the applicant and the CEO. For applicants, the primary requirement is to ensure that their application is made in good faith and provides all necessary information to demonstrate that the goods in question do not have substitutable alternatives produced in Australia (section 269C). The CEO, on the other hand, must promptly assess the validity of the application against the core criteria, consult with relevant stakeholders, and make a decision based on the evidence provided (section 269K(1)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have objections to the TCO being made. This ensures transparency and fairness in the process.
Under the Customs Act 1901, there are no specific offences or penalties outlined for breaching the provisions related to TCOs. However, if an individual or entity fails to comply with the requirements of the Customs Act or the associated regulations, they may face civil or criminal consequences. For example, wilful or negligent false statements made in an application could lead to penalties under section 241 of the Act, which could include fines or imprisonment. The exact penalties would depend on the specific nature and severity of the breach.
It is also important to note that while the TCO itself does not impose any new liabilities on individuals or entities, it does affect the rights of importers. Importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). This ensures that those who have already imported the goods before the TCO was issued are not disadvantaged by the tariff concession. Overall, the legislation is designed to provide a fair and transparent process for tariff concessions while ensuring that the rights of all stakeholders are protected.