EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617063
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 spiral dough mixers on 11 September 2006.
Instrument
TCO No 0617063 was made on 1 December 2006. It declares that those certain spiral dough mixers 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. 0617063 is taken to have come into force on 11 September 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 by the Australian Parliament to provide for the regulation of imports and exports through the imposition of customs duties and other charges, and to establish a framework for the administration of these duties. The Act aims to protect domestic industries by controlling the flow of goods into and out of Australia while generating revenue for the government. One of the mechanisms provided by the Act is the ability to grant tariff concession orders (TCOs), which allow for the reduction or exemption of customs duties on specific goods under certain conditions. This approach helps to address economic disparities and support industries by making imported goods more competitively priced in the Australian market. The Tariff Concession Instrument No. 0617063, made under the authority of the Customs Act, provides a practical example of this mechanism by granting a tariff concession to Moffat Pty Ltd for certain spiral dough mixers, reducing the duty rate from 5% to 0%. This order was made following a successful application and after satisfying the core criteria that no substitutable goods were produced in Australia in the ordinary course of business.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, applies to individuals and entities seeking a concession on customs duty for specific goods. This scheme is operationalised by the Chief Executive Officer of Customs, who has the authority to issue TCOs when certain criteria are met. Specifically, a TCO may be issued if the goods in question are not specified as ineligible under section 269SJ of the Act, and if no substitutable goods are produced in Australia at the time the application is lodged. The geographic scope of this legislation is national, as it operates under the Commonwealth and applies to all imports into Australia. However, it does not affect the rights of any person as at the date of registration of the TCO, meaning that any pre-existing rights or liabilities are preserved. In the case of TCO No. 0617063, certain spiral dough mixers were granted a duty concession, reducing their duty rate from 5% to 0%, effective from the date of the application, 11 September 2006. This order is subject to the Customs Tariff Act 1995 and the Customs Regulations 1996, which provide further details on the application and administration of these concessions.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows for an application to be made by a person seeking a TCO for specified goods. The CEO must then assess the application against the core criteria set out in section 269C, which requires that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269D, 269E, and 269P(3) of the Act. If the application meets these criteria, the CEO must issue a written order declaring that the goods in question are subject to a prescribed rate of duty outlined in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the CEO and the applicant. The CEO must ensure that any application is assessed against the criteria mentioned above and must make a decision based on these criteria. The applicant, on the other hand, must provide all necessary information and documentation to support their application. Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission. In the case of TCO No. 0617063, the CEO did not receive any submissions.
Should the CEO or any party fail to comply with the provisions of the Customs Act 1901, the consequences could be significant. While the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 could lead to civil or criminal penalties, depending on the nature and severity of the breach. For example, knowingly providing false or misleading information in an application could lead to fines or imprisonment under section 276 of the Act. Moreover, any failure to adhere to the terms of a TCO once it is granted could also lead to financial penalties or other legal consequences. The rights of importers are protected, and they can apply for a refund of duty on goods imported since the TCO came into force, as stipulated in paragraph 126(1)(r) of the Regulations.