EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707608
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.
Multivac Australia Pty Ltd applied for a TCO in respect of certain food processing rooms on 22 May 2007.
Instrument
TCO No 0707608 was made on 30 July 2007. It declares that those certain food processing rooms 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. 0707608 is taken to have come into force on 22 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 Customs Act 1901, enacted by the Australian Parliament, includes provisions for Tariff Concession Orders (TCOs) that provide lower rates of customs duty on certain imported goods. The Act was designed to address the need for flexible tariff arrangements to support industry development and competitiveness. The Tariff Concession Instrument No. 0707608, made on 30 July 2007, is an example of such an order, responding to an application by Multivac Australia Pty Ltd for concessional treatment of certain food processing rooms. This instrument was enacted following satisfaction by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, thereby meeting the core criteria under the Act. The policy objective is to allow for tariff relief that benefits importers without imposing any liabilities or disadvantaging other parties.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0707608, pertains specifically to the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any individual or entity seeking to import goods that may qualify for reduced customs duty rates, provided that the goods in question do not fall under the restricted categories specified in section 269SJ of the Act. The scope of the Act extends to all industries and transactions involving the importation of goods eligible for tariff concessions, thereby directly impacting importers and businesses reliant on such imports. The Act operates nationally across Australia, aligning with the broader objectives of the Customs Act 1901. The application process involves an assessment by the CEO to ensure that no substitutable goods are produced in Australia, which is a core criterion outlined in section 269C. The Act's application may be further refined or expanded through subordinate instruments, thereby allowing for flexibility and adaptability in addressing specific trade-related issues.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0707608 (referenced as TCO No. 0707608) pertain to the application and approval process for a Tariff Concession Order (TCO) under the Customs Act 1901 (section 269F). Specifically, section 269C outlines the core criteria that must be met for a TCO to be granted, which requires that no substitutable goods are produced in Australia on the day the application was lodged (section 269P(3)). If these criteria are satisfied, the Chief Executive Officer of Customs (CEO) is mandated to make a written order, declaring that the goods specified in the application are subject to the prescribed tariff concession (section 269P(3)). In this case, TCO No. 0707608 declares that certain food processing rooms are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced duty rate from 5% to 0%.
The Act imposes certain obligations on the parties involved in the TCO process. For applicants, such as Multivac Australia Pty Ltd in this instance, it is necessary to ensure that the application is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO has the responsibility of verifying that the application meets the core criteria (section 269C) and, if satisfied, must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). Furthermore, the CEO must make a written TCO if the criteria are met (section 269P(3)). The CEO must also ensure that the TCO does not affect the rights of any person other than the Commonwealth adversely or impose any liabilities on them in respect of actions taken before the TCO was registered (subsection 269S(1)).
In terms of offences, penalties, and consequences for breach, the Act does not specify particular offences related to the TCO process itself. However, failure to comply with the terms of a TCO or any related customs regulations could lead to civil or criminal penalties under the broader provisions of the Customs Act 1901. For example, providing false or misleading information in an application could result in fines or other penalties as prescribed by the Act. The specific penalties would depend on the nature and severity of the breach, but could include substantial fines or imprisonment under the general enforcement provisions of the Act.
Overall, TCO No. 0707608 simplifies the importation of certain food processing rooms by reducing the customs duty from 5% to 0%. The Act ensures that the process for granting TCOs is transparent and fair, with obligations placed on both applicants and the CEO to ensure that the criteria are met and the rights of all parties are protected. While the specific penalties for non-compliance with TCO provisions are not detailed, the broader enforcement mechanisms within the Customs Act 1901 provide a framework for addressing breaches.