EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707562
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.
Columbit Australia Pty Ltd applied for a TCO in respect of certain meat grinding lines on 21 May 2007.
Instrument
TCO No 0707562 was made on 27 July 2007. It declares that those certain meat grinding 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. 0707562 is taken to have come into force on 21 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. 0707562 was enacted in 2007 under the Customs Act 1901, aimed at addressing the need for tariff concessions to support specific industries by reducing customs duties on particular goods. The instrument was created to facilitate the granting of tariff concessions to businesses like Colombit Australia Pty Ltd, which applied for tariff concessions on certain meat grinding lines on May 21, 2007. The policy objective, as outlined in the Customs Act, is to ensure that if a substitutable good is not produced in Australia in the ordinary course of business, the application for a tariff concession order can proceed. The instrument was enacted by the Chief Executive Officer of Customs, ensuring that the tariff concession was implemented in line with the Act's provisions and the established criteria for such applications.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes the framework through which Tariff Concession Orders (TCOs) are granted by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking a reduction in customs duty for specified goods by applying for a TCO. The application process is subject to certain criteria, including the absence of substitutable goods produced in Australia at the time of application. If the application meets these criteria, the CEO must issue a TCO, which provides for a lower rate of customs duty on the specified goods. The TCO applies nationally across Australia and does not affect any rights or liabilities of individuals or entities other than the Commonwealth, provided the TCO does not disadvantage those individuals or entities or impose liabilities for actions taken before the TCO's effective date. This mechanism allows for the modification of duty rates based on the specific production and trade contexts, ensuring a balanced approach to trade concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0707562 under the Customs Act 1901 (section 269F) require the Chief Executive Officer (CEO) of Customs to consider and process applications for Tariff Concession Orders (TCO). If the CEO is satisfied that an application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia (section 269C), they must make a written order (section 269P(3)). In this case, the CEO determined that the application from Columbit Australia Pty Ltd for certain meat grinding lines met these criteria, and thus issued TCO No. 0707562 on 27 July 2007. This order declares that these meat grinding lines are subject to a 0% duty rate instead of the general 5% rate.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. The CEO must also publish a notice in the Gazette (section 269K(1)) inviting submissions from interested parties once an application is accepted as valid. Additionally, the CEO must determine whether the application meets the core criteria, specifically checking that no substitutable goods are produced in Australia at the time of the application. In this instance, the CEO confirmed that no such goods existed, leading to the issuance of the TCO.
In terms of consequences for breach, the Customs Act 1901 does not explicitly detail specific offences or penalties related to the issuance or misuse of TCOs. However, general provisions within the Customs Act could apply, such as penalties for fraudulent activities or misrepresentation. Inaccuracies in TCO applications or fraudulent claims could potentially lead to legal action against the applicant, with penalties varying depending on the severity and nature of the breach. The Act ensures that the TCO does not affect the rights of any person adversely as at the date of registration, and it does not impose any liabilities on any person for actions taken prior to the registration date.