EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619475
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.
Sunbeam Corporation Pty Ltd applied for a TCO in respect of certain chocolate fountains on 08 December 2006.
Instrument
TCO No 0619475 was made on 09 March 2007. It declares that those certain chocolate fountains 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. 0619475 is taken to have come into force on 08 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 Parliament of Australia, provides a framework for the regulation of customs and excise duties. The introduction of the Tariff Concession Instrument No. 0619475 in 2007 addresses the need to provide relief from customs duties on specific goods that do not have domestic substitutes, thereby supporting trade and economic efficiency. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions on goods that meet certain criteria, specifically where no substitutable goods are produced in Australia. The policy objective is to facilitate the importation of goods that are not domestically produced, thereby supporting competitive markets and consumer choice.
The Tariff Concession Order No. 0619475, which came into effect on 8 December 2006, applies to certain chocolate fountains, granting them a free rate of duty as no substitutable goods were produced in Australia. This measure was introduced following an application by Sunbeam Corporation Pty Ltd and after no submissions were received in opposition to the order. The implementation of this order ensures that importers can benefit from a reduction in customs duties, while also protecting the rights of all parties involved, including the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO), allowing for reduced customs duties on certain goods. This mechanism is available to any person who applies to the CEO for a TCO in respect of goods not specified in section 269SJ, which excludes particular goods from this concession. The CEO must ensure that the application meets core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The TCO applies nationally, affecting the importation of specified goods by reducing the duty rate from the general rate to free, as seen in TCO No 0619475 concerning certain chocolate fountains. This instrument came into force on the date the application was lodged, 08 December 2006, and does not affect the rights of any person as at the date of registration to their disadvantage nor impose any liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically concerning Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, and 269F (section 269F). These sections outline the process and criteria for applying for a TCO, the definitions of relevant terms such as "goods produced in Australia" and "ordinary course of business", and the requirement that a TCO application must meet the core criteria. Section 269F details the application process, whereas section 269C stipulates the core criteria that must be satisfied for a TCO to be granted. Section 269P(3) then requires the Chief Executive Officer of Customs (the CEO) to issue a written order (the TCO) if the application meets these criteria.
The Customs Act imposes several obligations and requirements on the parties involved. For example, section 269K(1) requires the CEO to publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be granted. This ensures transparency and provides an opportunity for stakeholders to voice their concerns. Additionally, section 269S(1) stipulates that a TCO is effective from the date the application was lodged, ensuring that the process is timely and efficient. The CEO must also ensure that the goods subject to the TCO are not substitutable goods produced in Australia, as per section 269C. This means that if similar goods are being produced domestically, the application for a TCO will not be approved.
In terms of consequences for breach, the Customs Act does not explicitly detail offences, penalties, or civil/criminal consequences for failing to comply with the provisions concerning TCOs. However, breaches of the Customs Act generally can result in significant penalties. For instance, under section 264 of the Act, any person found guilty of an offence can be subject to fines and imprisonment. The specific penalties would depend on the nature and severity of the breach, but they can include substantial fines up to $220,000 for corporations and imprisonment for up to five years. Moreover, there are potential civil penalties for non-compliance, including fines and compensation for any losses incurred as a result of the breach.