EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714198
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.
Vadals Butcher Supplies applied for a TCO in respect of certain filling and/or stuffing machines on 4 September 2007.
Instrument
TCO No 0714198 was made on 9 November 2007. It declares that those certain filling and/or stuffing 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 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. 0714198 is taken to have come into force on 4 September 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, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on specified goods, provided certain criteria are met. The Act was introduced to address the need for flexibility in customs duties to support economic policies, such as promoting the importation of essential goods not produced locally. The policy objective is to facilitate trade by reducing duty rates on goods for which there are no substitutable Australian-made alternatives, thereby encouraging competition and potentially lowering costs for businesses and consumers. Tariff Concession Instrument No. 0714198, made under this Act, exemplifies the application of these principles by granting a concession on certain filling and/or stuffing machines, effectively reducing their duty from 5% to 0%.
Scope and Application
The Customs Act 1901, specifically as amended by Tariff Concession Instrument No. 0714198, applies to any person or entity seeking a tariff concession for certain imported goods. This Act is applicable nationally within Australia and is administered by the Chief Executive Officer of Customs. The Act allows for the reduction of customs duty on specific goods, provided the application for such concessions meets the core criteria set out in the Act, which includes the condition that no substitutable goods are produced in Australia at the time of application. The geographic reach of this Act is nationwide, affecting all importers within Australia. The Act does not impose any liabilities on persons other than the Commonwealth and does not affect the rights of any person as at the date of registration. Exemptions apply where the goods in question are specified in section 269SJ of the Act, which outlines goods that cannot be subject to a tariff concession order. This instrument extends the application of the Customs Act through the creation of specific tariff concession orders as determined by the CEO, who must ensure that any applications for tariff concessions meet the criteria outlined in the Act.
Key Provisions
The main operative sections of the Customs Act 1901 as they pertain to Tariff Concession Orders (TCO) include sections 269F, 269C, 269B, and 269P (subsection 3). Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods", while section 269P(3) requires the CEO to make a written order if satisfied that the application meets the core criteria.
The Act imposes several obligations on the parties involved. The CEO must decide whether an application meets the core criteria, which involves determining if no substitutable goods were produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Additionally, the CEO must ensure that any TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on them in respect of actions taken before the TCO's registration.
Breaches of the Customs Act 1901 can lead to various penalties and consequences. Although the specific offences and penalties related to TCOs are not detailed in the provided text, general breaches of customs legislation can result in both civil and criminal penalties. Civil penalties can include fines up to several thousand dollars, depending on the severity and frequency of the breach. Criminal penalties can include imprisonment, with the exact duration depending on the nature and extent of the offence. These penalties are intended to ensure compliance with the Act and its provisions for tariff concessions.