EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618150
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.
Breville Pty Ltd applied for a TCO in respect of certain doughnut makers on 2 November 2006.
Instrument
TCO No 0618150 was made on 19 January 2007. It declares that those certain doughnut 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. 0618150 is taken to have come into force on 2 November 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 regulate customs and excise duties in Australia, and Part XVA within this Act provides a framework for Tariff Concession Orders (TCOs), which allow for the reduction of customs duty on specific goods. This mechanism addresses the problem of ensuring that Australian consumers and businesses can access certain goods at a reduced cost, thereby promoting economic efficiency and competitiveness. The instrument F2007L00313, made under this Act, was introduced by the Parliament of Australia and aims to provide tariff concessions on particular goods to ensure they are accessible without prohibitive costs. The Tariff Concession Instrument No. 0618150, specifically for certain doughnut makers, was introduced to reduce the customs duty from the general rate of 5% to 0%, facilitating lower prices for consumers and potentially encouraging local consumption or use of these goods.
Scope and Application
The Tariff Concession Instrument No. 0618150 under the Customs Act 1901 applies to the concession of customs duty rates on certain doughnut makers imported into Australia, as determined by the Chief Executive Officer of Customs. This legislation is specifically designed for goods that are subject to Tariff Concession Orders (TCOs), with the purpose of granting lower rates of customs duty. The application of this Act is limited to entities or individuals involved in the importation of goods that meet the criteria outlined in the Act, with the primary focus on those that do not have substitutable goods produced in Australia and thus qualify for duty concessions. The geographic reach of this Act is national, as it pertains to imports across Australia. The Act does not specify exclusions or exemptions other than those outlined in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations, which provide further detail on the implementation and administration of tariff concessions.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), establish a framework under which certain goods may be eligible for reduced customs duty rates. Specifically, section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of particular goods. If the application is deemed valid and meets the core criteria set out in section 269C, the CEO is mandated to issue a written order that reduces the customs duty on the specified goods. For instance, in TCO No. 0618150, the CEO declared that certain doughnut makers are subject to a 0% duty rate, down from the general rate of 5%, following an application by Breville Pty Ltd on 2 November 2006.
The Act imposes specific obligations on both applicants and the CEO. Applicants must ensure their goods do not fall under the restricted list specified in section 269SJ and must demonstrate that no substitutable goods are produced in Australia, as outlined in section 269C. The CEO, on the other hand, has the responsibility to assess whether an application meets the core criteria and, if so, to publish a notice in the Gazette inviting submissions from interested parties before making a decision. Additionally, the CEO must ensure that any TCO does not disadvantage existing rights of non-Commonwealth entities or impose liabilities for actions taken before the TCO's effective date.
Should any party contravene the provisions of the Customs Act 1901, including the requirements for TCO applications or the CEO's decisions, there may be significant legal consequences. Offences under the Act can lead to civil or criminal penalties, although the specific penalties are not detailed in the explanatory statement. It is, however, clear that non-compliance could result in financial penalties, legal action, or both, depending on the severity and nature of the breach. The exact penalties would be determined based on the specific sections of the Act that are violated and the discretion of the courts.