EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710495
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.
Bronson & Jacobs Pty Ltd applied for a TCO in respect of certain food emulsifiers on 04 July 2007.
Instrument
TCO No 0710495 was made on 14 September 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. 0710495 is taken to have come into force on 04 July 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, facilitates a scheme for the creation of Tariff Concession Orders (TCOs) which provide for reduced rates of customs duty on certain goods. The Act was designed to address the need for a flexible mechanism to adjust customs duties in response to specific economic and market conditions. The instrument F2007L03736, or Tariff Concession Instrument No. 0710495, was introduced to provide a tariff concession for certain food emulsifiers applied for by Bronson & Jacobs Pty Ltd. The policy objective underpinning this concession is to support Australian businesses by reducing the cost of importing these specific goods, thus making them more competitive. The instrument was enacted following a process that included public consultation, with no objections received, and came into effect on the date the application was lodged, 4 July 2007.
Scope and Application
The Customs Act 1901, as amended, applies to the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, allowing for lower rates of customs duty on specified goods. The Act applies to any person or entity seeking to import goods that are not produced domestically in the ordinary course of business and that do not fall within the exclusions outlined in section 269SJ. The application process under section 269F involves determining whether the goods in question meet the core criteria, specifically that no substitutable goods are produced in Australia, as defined by sections 269C, 269D, and 269E. Once the CEO is satisfied that the application meets these criteria, they must issue a written order that specifies the lower rate of duty applicable to the goods. The geographic scope of the Act is national, affecting all states and territories within Australia, as it pertains to the administration of customs duties across the Commonwealth. The application of this Act extends to all industries that rely on the importation of goods, and the specified exclusions ensure that certain goods, as defined in section 269SJ, are not eligible for tariff concessions.
Key Provisions
The Customs Act 1901, as amended, includes a framework within which Tariff Concession Orders (TCOs) can be created by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows a person to apply to the CEO for a TCO concerning certain goods. If the CEO determines that the application is valid and meets the core criteria outlined in section 269C, the CEO is mandated to make a written TCO. This order declares that the specified goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, resulting in a lower rate of customs duty for those goods.
Under section 269B of the Act, a TCO application must meet the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269D defines what is meant by "goods produced in Australia", section 269E describes "ordinary course of business", and section 269D specifies what "substitutable goods" means in relation to the goods the subject of a TCO application. Bronson & Jacobs Pty Ltd applied for a TCO for certain food emulsifiers on 04 July 2007, and the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0710495 on 14 September 2007.
The Act imposes several obligations and requirements on the parties and entities it governs. Firstly, section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes there are reasons why the TCO should not be made. If no submissions are received, the CEO can proceed with the TCO. Section 269S(1) of the Act provides that a TCO is to be taken as having come into force on the day on which the application for the TCO was lodged. The rights of importers are beneficially affected by the TCO, as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
The Act does not provide for specific offences, penalties, or consequences for breach in relation to TCOs, but general provisions of the Customs Act 1901 apply. For example, section 214 of the Act states that any person who wilfully makes a false statement or representation in connection with any matter or thing required or authorised by the Act can be liable to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both. In the context of TCOs, any breach of the conditions or misrepresentations in the application process could potentially lead to such penalties. Additionally, the Act ensures that 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 in respect of anything done or omitted to be done before the date of registration.