EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706739
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.
Danisco Australia Pty Ltd applied for a TCO in respect of certain food emulsifiers on 07 May 2007.
Instrument
TCO No 0706739 was made on 27 July 2007. It declares that those certain food emulsifiers 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. 0706739 is taken to have come into force on 07 May 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 Tariff Concession Instrument No. 0706739, enacted in 2007, addresses a specific problem within the Customs Act 1901 by providing a framework for the Chief Executive Officer of Customs (CEO) to grant tariff concessions on certain goods. This instrument was introduced to alleviate the financial burden on importers by potentially reducing or eliminating customs duties on specified goods, provided that no substitutable goods are produced in Australia. The CEO's role is to assess applications for tariff concession orders (TCO) and determine if they meet the core criteria outlined in the Act. If satisfied, the CEO must issue a TCO, which in the case of Instrument No. 0706739, pertains to certain food emulsifiers, resulting in a zero rate of duty for these goods. The policy objective here is to ensure that the concessions do not disadvantage any person or impose new liabilities, while potentially benefiting importers by allowing them to seek refunds on duties paid on these goods since the effective date of the TCO.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 0706739, applies to entities and individuals involved in the importation of specific goods for which a Tariff Concession Order (TCO) has been granted. This instrument specifically relates to certain food emulsifiers, which are subject to a concession under the Customs Tariff Act 1995. The application of this Act is restricted to the Commonwealth jurisdiction, impacting the customs duty rates on the specified goods. The TCO exempts these particular food emulsifiers from the general customs duty rate of 5%, allowing them to enter the market duty-free. The Act does not apply to goods that are specified in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. The application process involves an assessment by the Chief Executive Officer of Customs to determine if the goods meet the core criteria for a TCO, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. This legislation does not extend or restrict its application through subordinate instruments beyond the specific terms outlined in the instrument itself.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0706739 include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269SJ of the Customs Act 1901, as well as relevant provisions from the Customs Tariff Act 1995. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C stipulates that the CEO must consider whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia as per section 269B. The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P(3) respectively. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO, as stated in section 269P(3).
The Customs Act 1901 imposes several obligations on parties involved in the TCO process. The CEO must decide whether an application for a TCO meets the core criteria, which includes verifying that no substitutable goods are produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, as per section 269K(1). In this case, since no submissions were received, the CEO proceeded to issue the TCO. Importers, on the other hand, have the obligation to apply for a refund of duty on goods imported since the TCO came into force, as stipulated under paragraph 126(1)(r) of the Regulations.
The Act provides for potential civil and criminal consequences for breaches of its provisions, although the specific offences and penalties are not detailed in the Explanatory Statement. Generally, under the Customs Act 1901, breaches can lead to fines and imprisonment, with penalties varying depending on the severity and nature of the offence. For instance, knowingly making a false statement or representation can result in fines and imprisonment, as outlined in sections 213 and 214 of the Act. It is important to refer to the specific sections of the Customs Act 1901 for detailed information on the penalties associated with various breaches.