EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708834
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.
Devro Pty Limited applied for a TCO in respect of certain collagen sausage casings dryer and re-humidifier machines on 08 June 2007.
Instrument
TCO No 0708834 was made on 24 August 2007. It declares that those certain collagen sausage casings dryer and re-humidifier machines 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. 0708834 is taken to have come into force on 08 June 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 by the Parliament of Australia to provide for the regulation of customs and excise duties, as well as the administration of customs and excise laws. One of the issues the Act was designed to address is the facilitation of trade by allowing for tariff concessions on certain goods through the mechanism of Tariff Concession Orders (TCOs). This particular instrument, F2007L03503, was introduced to address the need for tariff concessions for specific goods, in this case, certain collagen sausage casings dryer and re-humidifier machines, thereby providing a lower rate of customs duty on these items and promoting their accessibility and affordability. The instrument was issued by the Chief Executive Officer of Customs in accordance with the legislative framework provided by the Customs Act 1901, ensuring that the process for granting tariff concessions is transparent and allows for public consultation where necessary.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs), which are applied by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. Any person may apply to the CEO for a TCO in respect of goods, provided the application does not pertain to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO is obligated to determine whether the application meets the core criteria, specifically if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. The Act specifies that certain definitions apply to these terms, ensuring a clear understanding of what constitutes 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. If the CEO finds that the application meets these criteria, they must issue a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, which effectively reduces the rate of duty applicable to those goods. This legislative provision allows for the exemption of specific goods from the general customs duty rate, thereby facilitating trade by reducing costs for certain imported items.
Key Provisions
The Tariff Concession Order No. 0708834, made under section 269F of the Customs Act 1901, provides a concession on customs duty for certain collagen sausage casings dryer and re-humidifier machines (section 269P(3)). The general duty on these goods is 5%, but the TCO reduces this rate to free (subsection 269S(1)). The TCO was made on 24 August 2007 and is effective from 8 June 2007, the date on which the application was lodged.
The key obligation imposed by this TCO is on the Chief Executive Officer of Customs (CEO) to determine whether the application for a tariff concession meets the core criteria as outlined in section 269C of the Customs Act 1901. This involves confirming that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. In this instance, the CEO concluded that the application met the criteria because no such substitutable goods were being produced in Australia. This decision was made in accordance with the definitions provided in sections 269D, 269E, and 269F of the Act.
Any breach of the conditions or obligations under this TCO could potentially lead to legal consequences. However, the Explanatory Statement does not detail specific offences, penalties, or consequences for breach of the TCO. It is important to note that the TCO does not affect any existing rights or impose any liabilities on persons other than the Commonwealth. The rights of importers will be positively affected, as they can apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. The TCO explicitly states that it does not impose any liabilities on any person.