EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618984
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.
Elliott Automation applied for a TCO in respect of certain chocolate temperes and/or moulders on 27 November 2006.
Instrument
TCO No 0618984 was made on 2 March 2007. It declares that those certain chocolate temperes and/or moulders 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. 0618984 is taken to have come into force on 27 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, enacted by the Parliament of Australia, provides a framework for the imposition of customs duties on imported goods. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for reduced duty rates on certain goods. The problem or gap this legislation addresses is the potential disadvantage to Australian businesses when comparable goods are produced domestically, potentially limiting their competitiveness. This was introduced to ensure that Australian industries are not unfairly burdened by higher tariffs on goods that have domestic alternatives. The explanatory statement for Tariff Concession Instrument No. 0618984 outlines the process by which the Chief Executive Officer of Customs determines the eligibility of goods for a tariff concession based on the absence of substitutable goods produced in Australia. The policy objective of this specific instrument is to provide tariff relief for certain chocolate temperers and moulders, ensuring that Australian businesses can remain competitive in the market. The instrument was made on 2 March 2007, following an application by Elliott Automation, and came into effect on 27 November 2006, with no submissions received in opposition to the concession.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that reduce customs duty on certain goods. These orders apply to goods specified in an application, provided the CEO is satisfied that the application meets core criteria, which include the absence of substitutable goods produced in Australia. The scope of the Act extends to any individual or entity that imports the specified goods and seeks to benefit from the reduced customs duty, provided that the goods do not fall under the exclusions outlined in section 269SJ. The Act applies nationally, as it is a Commonwealth instrument, and its application may be further detailed or refined through subordinate instruments. Notably, the Act does not disadvantage existing rights of individuals or entities, ensuring that the concessions only affect future transactions and do not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of the Tariff Concession Order No. 0618984 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO determines that the application meets the core criteria, they are required to issue a written TCO, declaring that the specified goods will be subject to a lower rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). In this case, the TCO reduces the duty on certain chocolate temperers and moulders from 5% to 0%.
The Act imposes certain obligations on the parties involved. Firstly, it requires the CEO to ensure that the application for a TCO does not pertain to goods specified in section 269SJ, which cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria under section 269C, they must make a TCO. The CEO must also publish a notice in the Gazette (subsection 269K(1)), inviting submissions from any interested parties who might have reasons why the TCO should not be made. In this instance, no submissions were received.
There are no explicit offences or penalties outlined in the Act for failing to comply with the TCO requirements. However, any breach of the Customs Act 1901 or the Customs Tariff Act 1995 could lead to civil or criminal consequences, including fines and imprisonment, depending on the nature and severity of the breach. The maximum penalties for breaches of the Customs Act can include fines of up to $11,100 and/or imprisonment for up to 2 years for individuals, and higher penalties for corporations.
The TCO also provides for the rights of importers to apply for a refund of duty on goods imported since the TCO is taken to have come into force, which is beneficial to them. Importantly, the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken before the registration date of the TCO.