EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700017
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.
Inghams Enterprises Pty Ltd applied for a TCO in respect of certain individual quick freezing freezers on 02 January 2007.
Instrument
TCO No 0700017 was made on 16 March 2007. It declares that those certain individual quick freezing freezers 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. 0700017 is taken to have come into force on 02 January 2007.
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 administration of customs and excise, including the imposition of customs duty on imported goods. Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide tariff concessions on specific goods. This mechanism was introduced to address the need for flexibility in the application of customs duties, particularly to assist Australian businesses by reducing the cost of imported goods that do not have Australian-made equivalents. The policy objective is to ensure that Australian businesses can remain competitive in the market by reducing the cost of essential imported goods, thereby facilitating trade and economic growth. The Tariff Concession Instrument No. 0700017, made on 16 March 2007, is an example of this legislative intent, providing a tariff concession for certain individual quick freezing freezers, thereby reducing their duty from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 0700017 applies to goods that are the subject of a Tariff Concession Order (TCO) made under section 269F of the Customs Act 1901. Specifically, the Instrument pertains to certain individual quick freezing freezers, which are designated as goods that are eligible for a lower rate of customs duty under the prescribed item of Schedule 4 to the Customs Tariff Act 1995. The Act applies to any person who applies for a TCO, as well as the Chief Executive Officer of Customs who assesses and decides on such applications. The geographic scope of this legislation is national, as it pertains to the application of customs duties across Australia. The legislation excludes goods specified in section 269SJ of the Act, which are ineligible for a TCO. The application of the Act may be extended or restricted through subordinate instruments, although the primary legislation specifies the core criteria that must be met for a TCO to be granted. The commencement of the TCO is effective from the date the application is lodged, and it does not impose any liabilities or disadvantage any person other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901 in this context include section 269C, which outlines the core criteria for a Tariff Concession Order (TCO) application, and section 269P, which mandates that if these criteria are met, the Chief Executive Officer (CEO) of Customs must issue a written TCO. Specifically, section 269C requires that, at the time the application is lodged, there should be no substitutable goods produced in Australia in the ordinary course of business. Section 269P(3) specifies that if the CEO is satisfied that the application meets these criteria, they must make a TCO.
The obligations imposed by the Act on parties applying for a TCO are primarily centred around ensuring the application is valid and meets the specified criteria. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. This transparency measure ensures that all relevant stakeholders have the opportunity to voice any objections. Moreover, section 269S(1) stipulates that a TCO is considered to have come into force on the day the application is lodged, as seen in the case of TCO No. 0700017, which was applied for on 2 January 2007 and is deemed effective from that date.
Regarding penalties and consequences, the Act does not explicitly detail criminal or civil penalties for breaches of the TCO provisions. However, it is important to note that the TCO itself does not disadvantage any person or impose new liabilities on anyone other than the Commonwealth. It simply alters the customs duty rate for specified goods, in this case, individual quick freezing freezers, from 5% to free, benefiting importers who can now apply for a refund of duty on goods imported since the TCO's effective date. The Act ensures that the rights of existing parties are not adversely affected by the TCO, maintaining a balance between regulatory objectives and stakeholder interests.