EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702194
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.
Olivesinfact (Pty) Ltd applied for a TCO in respect of certain fermentation vats on 22 February 2007.
Instrument
TCO No 0702194 was made on 18 May 2007. It declares that those certain fermentation vats 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. 0702194 is taken to have come into force on 22 February 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 Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) may be made to provide tariff relief on certain goods. This legislation was introduced to address the problem of ensuring that Australian industries have access to necessary goods at a reduced customs duty rate, thereby promoting economic efficiency and competitiveness. The process involves an application to the Chief Executive Officer of Customs, who must determine whether the application meets the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia. In the case of Tariff Concession Instrument No. 0702194, made on 18 May 2007, the CEO granted a concession for certain fermentation vats, setting the duty rate at free, down from the general rate of 5%, upon determining that no suitable Australian-made alternatives existed. This decision was made following an application by Olivesinfact (Pty) Ltd on 22 February 2007 and was published in the Gazette with an invitation for submissions, none of which were received. The TCO came into force on the date of the application, 22 February 2007, and benefits importers by allowing duty refunds for imports made since that date, without imposing any new liabilities.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) may be made, reducing the customs duty payable on specific goods. This is facilitated by Part XVA of the Act, which allows the Chief Executive Officer of Customs (CEO) to grant a TCO to an applicant provided the application meets certain core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. The instrument in question, TCO No. 0702194, was made on 18 May 2007, concerning certain fermentation vats, and declares that these vats are subject to a zero rate of customs duty under the Customs Tariff Act 1995. This particular order applies nationally across Australia and benefits importers of the specified goods by allowing them to claim a refund of duty on imports made since the day the TCO is taken to have come into force, which in this case is 22 February 2007. The instrument does not disadvantage any person by imposing liabilities for actions taken before the TCO's effective date, and it does not affect the rights of any person other than the Commonwealth.
Key Provisions
The key operative sections of the Customs Act 1901, specifically under Part XVA, establish a framework for Tariff Concession Orders (TCOs) which are to be made by the Chief Executive Officer of Customs (CEO). Section 269F allows for an application to the CEO for a TCO concerning specific goods. If the CEO determines that the application is valid and not for goods that are excluded under section 269SJ, they must then assess whether the application meets the core criteria as outlined in section 269C. This section stipulates that the application meets the core criteria if no substitutable goods were produced in Australia at the time of application, with definitions for terms such as "substitutable goods" and "ordinary course of business" provided in sections 269D, 269E, and 269F.
The Act imposes certain obligations on both the applicant and the CEO. The applicant must ensure that their application is valid and pertains to goods that are eligible for a TCO. The CEO, on the other hand, is obligated to publish a notice in the Gazette once an application is accepted, inviting submissions from any interested parties who may have reasons why the TCO should not proceed, as per section 269K(1). If no submissions are received, the CEO must then make a written TCO if the application meets the core criteria, as stipulated in section 269P(3).
Under the Act, failure to comply with the provisions can lead to civil or criminal consequences. For instance, if an entity knowingly or recklessly provides false information in an application for a TCO, they could face penalties under the relevant sections of the Customs Act. However, the specific penalties are not detailed in the explanatory statement, and would typically be found in the Act or associated regulations. The consequences of breaching the Act could include fines or other civil penalties, depending on the nature and severity of the breach.