EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613413
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.
Simplot Australia Pty Limited applied for a TCO in respect of certain fried food defatting vibrators on 14 August 2006.
Instrument
TCO No 0613413 was made on 27 October 2006. It declares that those certain fried food defatting vibrators 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. 0613413 is taken to have come into force on 14 August 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 was amended to include a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0613413, enacted in 2006, addresses the gap in the Customs Act by establishing a process for applying for tariff concessions for specific goods. This instrument was introduced to facilitate the application process for tariff reductions, ensuring that no substitutable goods were produced in Australia at the time of application. The Australian Parliament enacted this measure to provide flexibility in customs duty rates, thereby encouraging trade and supporting businesses that rely on importing specific goods. The policy objective is to reduce the duty on certain goods when there are no domestic alternatives, aiding businesses in maintaining competitive pricing and operational efficiency.
Scope and Application
The Tariff Concession Instrument No. 0613413 is an instrument made under Part XVA of the Customs Act 1901, which provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for specified goods. This instrument applies to Simplot Australia Pty Limited’s application for a TCO concerning certain fried food defatting vibrators, granting them a concession that reduces the customs duty on these goods from the general rate of 5% to free. The instrument's application is limited to the goods specified in the TCO and does not affect any rights or liabilities of parties other than the Commonwealth as of the date of the application. Furthermore, the instrument's scope is national, as it operates within the Customs Act 1901, which has a Commonwealth reach. The CEO must ensure that the application meets the core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business, before making the TCO. The CEO also publishes a notice in the Gazette inviting submissions from any interested parties, though in this case, no submissions were received.
Key Provisions
The Customs Act 1901 allows the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) under section 269F, which apply lower rates of customs duty to specified goods. For a TCO to be issued, an applicant must ensure that the goods in question do not fall under the prohibited list in section 269SJ, and the CEO must be satisfied that the application meets the core criteria outlined in section 269C. Specifically, the CEO must determine that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as per section 269P(3). The TCO instrument, such as TCO No. 0613413 issued on 27 October 2006, will then declare that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the rate of duty specified in the order. In the case of Simplot Australia Pty Limited’s application for fried food defatting vibrators, the CEO was satisfied that no substitutable goods were produced in Australia, and the rate of duty on these goods was reduced to free, down from the general rate of 5%.
The obligations imposed by the Customs Act 1901 on the parties include ensuring that the goods subject to the TCO application are not substitutable goods produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from interested parties once a TCO application is accepted as valid, as per subsection 269K(1). The CEO must then consider any submissions received and decide whether the application meets the core criteria. The Act further mandates that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on such persons in respect of actions taken before the registration date.
Failure to comply with the requirements of the Customs Act 1901 or the provisions of a TCO may result in various consequences. The specific offences and penalties are not detailed within the explanatory statement, but breaches of customs regulations generally attract civil or criminal penalties, including fines and imprisonment. The exact penalties depend on the nature and severity of the breach and are determined by other relevant sections of the Customs Act 1901 and associated regulations.