EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703663
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.
The Smith's Snackfood Company Limited applied for a TCO in respect of certain potato crisps seasoning and distribution lines on 07 March 2007.
Instrument
TCO No 0703663 was made on 25 May 2007. It declares that those certain potato crisps seasoning and distribution 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 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. 0703663 is taken to have come into force on 07 March 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 was enacted to establish a comprehensive framework for the regulation of customs and border control in Australia. Specifically, Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme aims to address the gap in providing tariff concessions on certain goods, thereby reducing the customs duty for those goods and promoting economic efficiency and competitiveness. The instrument, Tariff Concession Instrument No. 0703663, was introduced to provide relief to specific importers by reducing the duty on certain potato crisps seasoning and distribution lines from 5% to free, provided that no substitutable goods were produced in Australia. The policy objective, as outlined in the Act, is to ensure that the application meets the core criteria, which includes the absence of substitutable Australian-made goods. The CEO published a notice in the Gazette inviting submissions but did not receive any objections, leading to the issuance of the TCO on 25 May 2007, which came into effect on 07 March 2007.
Scope and Application
The Customs Act 1901, through Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for goods, allowing for a lower rate of customs duty. A TCO applies to goods specified in an order, which provides tariff relief to applicants if certain criteria are met, such as the absence of substitutable goods produced in Australia. The application process requires the CEO to evaluate whether the application aligns with the core criteria, particularly the absence of substitutable Australian-made goods. Should the CEO determine that the application meets these criteria, a TCO is issued, effectively reducing or eliminating the customs duty on the specified goods. The geographic scope of this legislation is national, as it pertains to customs duties across Australia. The TCO does not impose any new liabilities on entities or individuals and does not retroactively affect any rights or obligations established prior to the issuance of the order. The application of the TCO is further refined and potentially extended through subordinate instruments, which can provide additional details or clarifications on the implementation and administration of the concessions.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) in this context are sections 269C, 269P, 269K, and 269S, which are relevant to the making of Tariff Concession Orders (TCOs). Section 269C outlines the core criteria that must be met for a TCO to be issued, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a TCO. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from interested parties after accepting a TCO application as valid. Finally, section 269S details the commencement of a TCO, which is deemed to have come into force on the day the application for the TCO was lodged.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs is obligated to review TCO applications to determine if they meet the core criteria outlined in section 269C. If the CEO determines that an application meets these criteria, they must issue a TCO as specified in section 269P. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit their views on whether the TCO should be made, in accordance with section 269K. The CEO is also responsible for ensuring that the TCO does not affect the rights of any person, other than the Commonwealth, in a manner that disadvantages them or imposes liabilities for actions taken before the TCO's registration, as outlined in section 269S.
In terms of offences, penalties, or consequences for breach, the explanatory statement does not specify any criminal or civil penalties for non-compliance with the TCO provisions. However, it is implicit that failure to adhere to the requirements for issuing a TCO or the obligations associated with the TCO process could result in legal action or administrative penalties, although the specific penalties are not detailed in the provided text. The focus is primarily on the procedural correctness and timely publication of notices and the issuance of TCOs based on the criteria set forth in the Act.