EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714199
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.
Danisco Australia applied for a TCO in respect of certain food emulsifiers on 04 September 2007.
Instrument
TCO No 0714199 was made on 30 November 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. 0714199 is taken to have come into force on 04 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 Commonwealth Parliament, establishes a framework for the administration of customs duties and related matters. Among its provisions, Part XVA facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty on specified goods, subject to certain criteria being met. The Act aims to streamline the process of applying for and granting tariff concessions, ensuring that the application process is transparent and that the rights of all stakeholders are protected. In the case of Tariff Concession Instrument No. 0714199, the legislation was used to address a specific application from Danisco Australia for tariff concessions on certain food emulsifiers. The instrument was enacted to provide a zero percent duty rate on these goods, effective from the date of application, after it was determined that no substitutable goods were produced in Australia. This measure was introduced to support the importation of these specific goods, benefiting importers by potentially allowing them to claim refunds on duties paid prior to the instrument's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on certain goods. This process applies to any person who submits an application for a TCO in respect of goods not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If satisfied, the CEO is required to issue a TCO that specifies the reduced rate of duty applicable to the goods in question. This legislation extends across the Commonwealth of Australia and does not disadvantage or impose liabilities on any person other than the Commonwealth regarding actions taken before the TCO’s effective date. The application of the TCO can be further detailed or modified through subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 0714199, under the Customs Act 1901, applies to certain food emulsifiers specified in the instrument (sections 269F, 269C, 269B, 269D, 269E, 269P(3)). It provides a lower rate of customs duty on these goods. Specifically, it declares that the certain food emulsifiers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby setting the duty rate at free (section 269P(3)). The instrument was made on 30 November 2007, and it is effective from 4 September 2007, the date the application for the tariff concession order (TCO) was lodged (subsections 269S(1), 269K(1)).
The obligations imposed by the Customs Act 1901 on the parties governed by the TCO include the requirement for the Chief Executive Officer (CEO) of Customs to decide whether an application for a TCO meets the core criteria (section 269C). The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. If the application meets the core criteria, the CEO must make a written TCO order (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received in response to the published notice.
The Act outlines specific consequences for breaches of its provisions. While the explanatory statement does not detail specific offences or penalties related to the TCO, general provisions of the Customs Act 1901 and related regulations might apply. Typically, breaches of customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. Importers who benefit from the TCO can apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations). It is important to note that the TCO does not affect the rights of any person to disadvantage them or impose liabilities in respect of actions taken before the date of registration (subsection 269S(1)).