EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703298
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.
King International Pty Ltd applied for a TCO in respect of certain yogurt production lines on 2 July 2007.
Instrument
TCO No 0703298 was made on 21 September 2007. It declares that those certain yogurt production lines 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. 0703298 is taken to have come into force on 2 July 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 Commonwealth Parliament, established a framework for the administration of customs and excise duties in Australia. The Act facilitates the application for Tariff Concession Orders (TCOs) by businesses seeking to import certain goods at a reduced customs duty rate. The intent behind this legislative mechanism is to support Australian industries by reducing the cost of essential imports, thereby aiding competitiveness without substitutable domestic production. This is particularly relevant for industries seeking to import specialised equipment or components that are not manufactured locally. Tariff Concession Instrument No. 0703298, made under the authority of the Customs Act 1901, addresses the specific need of King International Pty Ltd to import yogurt production lines at a zero duty rate, reflecting the core objective of the Act to facilitate trade while supporting domestic industries where applicable.
Scope and Application
The Customs Act 1901, as amended, provides the legislative framework for the administration of customs duties and related matters, including the granting of Tariff Concession Orders (TCOs) under section 269F. This Act applies to any person, including individuals and entities, who seeks to import goods into Australia and is interested in the application of customs duties. The Act's provisions are of Commonwealth jurisdiction, impacting national trade practices and import processes. The scope of the Act extends to all goods imported into Australia unless specifically excluded under section 269SJ, which outlines goods that cannot be subject to a TCO. The application of TCOs, such as Tariff Concession Instrument No. 0703298, is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia, as defined in section 269D, and that the production of such goods is not in the ordinary course of business, as defined in section 269E. Any exclusions or exemptions from the application of TCOs are strictly outlined in the Act, and the application process involves public consultation as per subsection 269K(1). The commencement date of a TCO is the date the application was lodged, as stipulated in subsection 269S(1). The Act ensures that the rights of non-Commonwealth persons are not adversely affected by the concession, and it provides mechanisms for duty refunds under paragraph 126(1)(r) of the Regulations for importers of goods subject to a TCO.
Key Provisions
The primary operative sections of this legislation concern the making of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269F). Specifically, section 269C outlines the core criteria that must be met for a TCO to be issued. If an application for a TCO is made, the Chief Executive Officer of Customs (CEO) must determine if the application meets the core criteria, which include the absence of substitutable goods produced in Australia on the date the application is lodged (section 269C). If these criteria are met, the CEO is mandated to issue a written TCO (section 269P(3)). This instrument declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a lower rate of customs duty (section 269P(3)).
Entities and individuals governed by this legislation must adhere to the requirements of section 269C when applying for a TCO. The CEO is obligated to assess whether the application meets the core criteria by verifying the absence of substitutable goods produced in Australia on the application date (section 269C). If the criteria are satisfied, the CEO must issue a TCO, specifying the applicable item from Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties who may object to the TCO (subsection 269K(1)). This ensures transparency and allows for potential objections to be considered before a TCO is issued.
Failure to comply with the requirements of this legislation may result in various consequences. There are no explicit offences or penalties outlined in the explanatory statement for non-compliance with the TCO provisions. However, the legislation implicitly suggests that if the CEO determines that an application does not meet the core criteria, the TCO will not be issued. Additionally, any failure to properly follow the consultation process by not publishing the notice in the Gazette or not considering valid submissions could potentially lead to administrative consequences, although specific penalties are not detailed in the explanatory statement. The rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations).