EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713864
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.
Fyna Foods Australia Pty Ltd applied for a TCO in respect of certain lollypop manufacturing line on 30 August 2007.
Instrument
TCO No 0713864 was made on 09 November 2007. It declares that those certain lollypop manufacturing 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 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. 0713864 is taken to have come into force on 30 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 for the regulation of customs duties and the facilitation of trade through various mechanisms, including the establishment of Tariff Concession Orders (TCOs). These orders, as outlined in Part XVA of the Act, allow for the reduction or exemption of customs duties on specific goods, provided certain criteria are met. The primary objective of this legislation is to promote economic efficiency and competitiveness by allowing businesses to import necessary goods at reduced rates, thereby lowering production costs and potentially prices for consumers. The explanatory statement for Tariff Concession Instrument No. 0713864, enacted in 2007, details the application of a TCO for certain lollypop manufacturing lines by Fyna Foods Australia Pty Ltd. This instrument was made to provide a tariff concession on these specific goods, which were determined to have no substitutable equivalents produced in Australia, thus meeting the core criteria under section 269C of the Act. The concession reduces the general duty rate of 5% to free, effective from the date the application was lodged, 30 August 2007. The process involved publication of the application in the Gazette with an invitation for submissions, none of which were received, leading to the CEO's decision to approve the TCO.
Scope and Application
The Tariff Concession Instrument No. 0713864 applies to goods specified in the application submitted to the Chief Executive Officer of Customs under section 269F of the Customs Act 1901. This legislation specifically concerns the process by which a Tariff Concession Order (TCO) can be issued to allow for a reduced rate of customs duty on certain goods, provided the application meets the criteria outlined in sections 269C, 269D, 269E, and 269F of the Act. The instrument applies to the lollypop manufacturing lines as designated by Fyna Foods Australia Pty Ltd, effective from the date of application, 30 August 2007. The geographic reach of this legislation is national, as it pertains to the Customs Act 1901 which is applicable throughout Australia. The Act does not apply to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. Any exclusions or exemptions are defined within the Act itself and the associated regulations, ensuring that the rights of importers are protected and no liabilities are imposed on any person as a result of this concession.
Key Provisions
The Customs Act 1901 provides a framework under which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) (section 269F). When an entity such as Fyna Foods Australia Pty Ltd applies for a TCO, they are essentially requesting a concession that results in a lower rate of customs duty on specified goods (section 269C). For instance, in TCO No. 0713864, the CEO determined that certain lollypop manufacturing lines were eligible for a TCO, effectively applying a duty rate of free instead of the general rate of 5% (section 50 of Schedule 4 to the Customs Tariff Act 1995).
The Act imposes several obligations on the CEO when processing a TCO application. Firstly, the CEO must ensure that the application is not in respect of goods that are specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. If the application is valid, the CEO must then assess whether it meets the core criteria, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they are mandated to make a written TCO order (section 269P(3)).
Upon accepting a TCO application, the CEO must also publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted (subsection 269K(1)). In the case of TCO No. 0713864, no submissions were received. Additionally, the TCO does not retroactively affect any rights or impose liabilities on individuals or entities other than the Commonwealth, meaning it only benefits those who import the goods after the TCO comes into force (subsection 269S(1)).
The Act does not explicitly outline specific offences or penalties for breach related to TCOs. However, any failure to comply with the terms of the TCO could potentially lead to legal consequences under other relevant sections of the Customs Act or associated regulations. For example, importing goods under false pretenses could attract penalties under section 126(1)(r) of the Regulations, which allows for duty refunds but also implies a requirement for accurate record-keeping and compliance with the TCO terms. While the exact penalties for breach are not specified in this context, they could range from fines to more severe legal actions depending on the nature and extent of the violation.