EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615794
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.
Moffat Pty Ltd applied for a TCO in respect of certain deep fryers on 13 October 2006.
Instrument
TCO No 0615794 was made on 22 December 2006. It declares that those certain deep fryers 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. 0615794 is taken to have come into force on 13 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 was enacted to provide for the regulation of customs and excise in Australia. This Act, along with its subsidiary legislation, establishes the framework for administering customs and excise duties, including the ability to grant tariff concessions. The Tariff Concession Instrument No. 0615794, enacted in 2006, is an example of this framework in action. The instrument was introduced to address the specific need for tariff concessions on certain imported goods, in this case, deep fryers, where it was determined that no substitutable goods were produced in Australia. This legislation allows the Chief Executive Officer of Customs to make Tariff Concession Orders, which lower the rate of customs duty on specified goods, thereby promoting trade and potentially benefiting importers by reducing their duty liabilities. The instrument was created in accordance with the provisions of the Customs Act, and the process involved publishing a notice in the Gazette to invite submissions, although none were received in this instance. The Tariff Concession Order came into effect on the date the application was lodged, providing immediate benefit to importers who could apply for refunds of duty paid on goods imported since the concession took effect.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to persons or entities seeking tariff concessions for goods that are not produced in Australia and do not have substitutable goods available domestically. Such applications are assessed against the core criteria, which stipulate that the goods in question must not be produced in Australia in the ordinary course of business and must have no substitutable Australian-made equivalents. The CEO is mandated to make a TCO if these criteria are satisfied, as evidenced by the example of Moffat Pty Ltd’s application for a tariff concession on certain deep fryers, which was granted on 22 December 2006. This instrument reduces the customs duty rate from 5% to 0% for the specified goods, effective from the date the application was lodged, 13 October 2006. The TCO does not affect the rights of any person as of the date of registration and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a scheme that allows the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) (sections 269C and 269P(3)). A TCO reduces the rate of customs duty on specified goods when certain criteria are met. Section 269F of the Act outlines the process for applying for a TCO, which involves submitting an application to the CEO. If the CEO determines that the application is valid and does not pertain to goods excluded under section 269SJ, they must assess whether it meets the core criteria specified in section 269C. This assessment is crucial because, if met, the CEO must issue a written order declaring the goods eligible for a reduced customs duty rate.
In terms of obligations, section 269C stipulates that an application meets the core criteria if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. Once a TCO is issued, it applies to the goods from the date the application was lodged (subsection 269S(1)). The CEO is also required to publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received (subsection 269K(1)).
Failure to comply with the requirements of the Customs Act 1901 or the Tariff Concession Order can result in various penalties and consequences. Although the specific penalties for breaching the Act are not detailed in the explanatory statement, it is common under Australian law for breaches to result in fines, imprisonment, or both, depending on the severity of the offence. The exact penalties would typically be found in the relevant sections of the Act or in associated regulations, but these are not specified in the provided text. However, it is clear that the TCO does not disadvantage any person or impose liabilities in respect of actions taken before the TCO's effective date (subsection 269S(1)). Instead, it beneficially affects importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).