EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0614826
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.
Inghams Enterprises Pty Ltd applied for a TCO in respect of certain flake ice makers on 26 October 2006.
Instrument
TCO No 0614826 was made on 12 January 2007. It declares that those certain flake ice makers 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. 0614826 is taken to have come into force on 26 October 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 duties and includes provisions for Tariff Concession Orders (TCOs). These orders aim to provide relief by reducing customs duty on specific goods, provided certain criteria are met. The Tariff Concession Instrument No. 0614826, introduced under this Act, addresses the gap by allowing the Chief Executive Officer of Customs to grant concessions when it is determined that no substitutable goods are produced in Australia. This legislative instrument was made to benefit importers by reducing the customs duty on certain flake ice makers to zero percent, from the general rate of five percent, as no similar goods were being produced locally. The policy objective is to support industries by making imported goods more competitively priced against locally produced alternatives, thus fostering economic growth and supporting businesses like Inghams Enterprises Pty Ltd.
Scope and Application
The Tariff Concession Instrument No. 0614826, made under the Customs Act 1901, applies to specific flake ice makers for which Inghams Enterprises Pty Ltd applied for a Tariff Concession Order (TCO). This instrument, issued by the Chief Executive Officer of Customs, provides a concession on customs duty for these goods, reducing the rate from the general 5% to 0%. The application of this concession is contingent upon the CEO determining that no substitutable goods are produced in Australia, meaning no goods that can be used interchangeably with the specified flake ice makers are manufactured domestically. This determination is made in accordance with the criteria outlined in sections 269C, 269D, 269E, and 269J of the Act. The instrument operates on a national level within Australia, affecting the rights of importers and potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date of 26 October 2006. The TCO does not disadvantage any person by imposing liabilities for actions taken before its registration. The scope of the Act is further extended through subordinate instruments, which may include additional criteria or specific guidelines for administering tariff concessions.
Key Provisions
The main operative sections of this legislation focus on the process and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria (section 269C), they must make a written order (section 269P). The CEO must also publish a notice in the Gazette inviting submissions on the application (subsection 269K(1)). The TCO then comes into force on the day the application was lodged (subsection 269S(1)). In this case, TCO No. 0614826 was made on 12 January 2007 for certain flake ice makers, declaring that these goods are subject to a 0% duty rate instead of the general 5% rate.
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure their application meets the core criteria, which include verifying that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO, on the other hand, has the duty to review the application and decide whether it meets the core criteria. If satisfied, the CEO must make a written TCO and publish a notice in the Gazette inviting submissions from the public (subsection 269K(1)). In this instance, no submissions were received by the CEO for TCO No. 0614826.
The legislation also outlines consequences for non-compliance. However, the provided text does not explicitly mention specific offences, penalties, or consequences for breaches of the TCO provisions. The focus is more on the procedural requirements and the effects of the TCO on the rights of importers and the general public. It is important to note that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted before the date of registration (subsection 269S(2)).