EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708593
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.
Derby Industries Pty Ltd applied for a TCO in respect of certain meat processing system on 29 August 2007.
Instrument
TCO No 0708593 was made on 21 November 2007. It declares that those certain meat processing systems 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. 0708593 is taken to have come into force on 29 August 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, provides a framework for the administration of customs and excise duties. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which grant tariff concessions on certain goods. The problem or gap this legislation addresses is the need to provide relief to businesses and consumers by reducing the tariff rates on specific goods, thereby making them more affordable and competitive. The instrument in question, F2007L04450, was introduced to facilitate such relief by providing a lower rate of customs duty on certain meat processing systems. The objective is to ensure that these goods, which are not produced in Australia, are subject to a concessional rate of duty, thus promoting economic efficiency and competitiveness. The instrument was published in the Gazette, allowing for public consultation, although no submissions were received. The TCO came into force on the date of application, 29 August 2007, and it does not affect any existing rights or impose liabilities on any person.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) scheme, provides a mechanism for the Chief Executive Officer of Customs (CEO) to grant tariff concessions on specific goods, thereby reducing the customs duty applicable to them. This Act applies to any person or entity seeking to import goods that are not produced in Australia in the ordinary course of business, and for which there are no substitutable goods available domestically. The scheme is designed to encourage the importation of goods that are not locally manufactured, thus potentially stimulating trade and investment. The geographic reach of this legislation is national, impacting importers across Australia. However, certain goods specified in section 269SJ of the Act are excluded from this concession, such as those that are restricted or prohibited. The application of this Act can be further extended or restricted through subordinate instruments, which may provide additional criteria or conditions for the issuance of TCOs. The commencement of the TCO is effective from the date the application is lodged, ensuring that the concession is retroactively applied to imports that occurred from that date onwards.
Key Provisions
The key provisions of this legislation, specifically the Tariff Concession Instrument No. 0708593, pertain to the Customs Act 1901. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application is deemed valid and meets the core criteria under section 269C, the CEO is required to issue a TCO. This instrument declares that the goods specified in the application are subject to a lower rate of customs duty than the general rate, in this case, a free rate instead of the usual 5% (subsection 269P(3)).
The obligations imposed on parties under this Act include the requirement for applicants to ensure their goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must then assess if the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C. Additionally, the CEO has a duty to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not be made, as outlined in subsection 269K(1).
The consequences of breaching the provisions of this Act can include both civil and criminal penalties. If an entity or individual fails to comply with the conditions set out in the TCO or provides false information in an application, they may be subject to penalties under the Customs Act 1901. The specific penalties can include fines or imprisonment, depending on the severity of the breach. For example, knowingly providing false or misleading information in an application can result in significant fines or imprisonment terms as stipulated in the Act. It is essential for all parties to adhere strictly to the legislative requirements to avoid these severe repercussions.