EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619254
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.
H.J.Heinz Company Australia Limited applied for a TCO in respect of a certain filling and sealing machine on 01 December 2006.
Instrument
TCO No 0619254 was made on 02 March 2007. It declares that those certain filling and sealing machines 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 free.
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. 0619254 is taken to have come into force on 01 December 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 Commonwealth Parliament, facilitates a scheme for Tariff Concession Orders (TCOs) which reduce customs duty on specific goods. This legislation was introduced to address the need for a streamlined process to provide tariff concessions on goods, ensuring that Australian businesses have access to competitively priced imported goods where there is no local production. The explanatory statement details Tariff Concession Instrument No. 0619254, made on 02 March 2007, which applies to a certain filling and sealing machine. The Tariff Concession Order was issued as a result of an application by H.J.Heinz Company Australia Limited on 01 December 2006, and was made effective from the same date. The policy objective of this instrument is to provide tariff concessions without imposing any new liabilities on persons other than the Commonwealth, and it allows for the refund of duties paid on the specified goods since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0619254 applies to the customs duty applicable on certain filling and sealing machines, as determined by the Customs Act 1901. This Act applies to goods that are subject to Tariff Concession Orders (TCOs), which are made by the Chief Executive Officer of Customs (CEO) under section 269F of the Act. The Act is applicable to goods that are imported into Australia and are subject to customs duty. A TCO applies to goods for which an application has been made and approved by the CEO, provided the goods do not fall under the category of goods that cannot be subject to a TCO as specified in section 269SJ of the Act. The geographic reach of the Act is national, as it applies to goods imported into Australia.
The TCO No. 0619254 was made on 02 March 2007, and it applies to certain filling and sealing machines, which are declared to be goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. The TCO reduces the rate of duty on these goods from the general rate of 5% to free. 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, as they 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.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0619254, as set out in Part XVA of the Customs Act 1901, focus on the establishment and application of Tariff Concession Orders (TCOs). Specifically, section 269F of the Act (1) allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the CEO determines that the application does not pertain to goods specified in section 269SJ (2), which lists goods that cannot be subject to a TCO, they must then assess whether the application meets the core criteria outlined in section 269C (3). This assessment hinges on whether, on the date the application was lodged, there were no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E (4). If the application satisfies these criteria, the CEO is mandated to issue a written order, which constitutes the TCO (5).
Under the Act, the CEO's obligations when processing a TCO application include ensuring that the application does not relate to prohibited goods and verifying that no substitutable goods were produced in Australia on the date the application was lodged (6). Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO (7). In this instance, no submissions were received, which likely facilitated the swift progression of the application (8). The TCO's commencement date is considered to be the date on which the application was initially lodged, thereby ensuring that the benefits of the concession are applicable retroactively from that date (9).
Regarding potential breaches of the legislation, the Act does not explicitly detail specific offences or penalties for failing to comply with the TCO requirements. However, the general legal framework governing customs duties and related administrative processes may impose penalties for non-compliance with the Act's provisions (10). These could include fines or other legal repercussions for those who do not adhere to the stipulated requirements for applying for and administering TCOs (11). It is essential for entities involved in the importation and production of goods to comply fully with these provisions to avoid any adverse legal consequences (12).