EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714652
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 Pty Ltd applied for a TCO in respect of certain chillers and or freezers on 07 September 2007.
Instrument
TCO No 0714652 was made on 30 November 2007. It declares that those certain chillers and or freezers 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. 0714652 is taken to have come into force on 07 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 was enacted to provide a comprehensive framework for the administration of customs and excise duties in Australia. This legislation, established by the Australian Parliament, was introduced to address the need for an efficient and effective customs regime, ensuring the collection of duties and taxes while facilitating international trade. One of its key components is the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). The policy objective of this scheme is to provide lower rates of customs duty on goods that are the subject of a TCO, provided that certain core criteria are met. Specifically, if no substitutable goods are produced in Australia, a TCO application may be approved, thereby offering relief to importers. This mechanism aims to support industries by reducing costs associated with importing specific goods, thereby fostering economic growth and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0714652 under the Customs Act 1901 applies specifically to goods for which a Tariff Concession Order (TCO) has been applied and subsequently granted. This legislation targets entities or individuals who seek to import certain chillers and freezers into Australia by granting them a concession that results in a reduction of customs duty from the standard rate to zero. The geographic and jurisdictional reach of this Act is Commonwealth-wide, meaning it applies nationally across Australia. The Act does not extend to goods specified in section 269SJ of the Customs Act 1901, which outlines goods that cannot be subject to a TCO. The application process involves an assessment by the Chief Executive Officer of Customs (CEO) to ensure that the imported goods do not have substitutable alternatives produced within Australia, thus meeting the core criteria set forth in section 269C of the Act. Once a TCO is granted, it takes effect from the date the application was lodged, and it does not impose any liabilities on persons other than the Commonwealth for actions taken before the date of registration.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, as detailed in sections 269C, 269F, and 269P. Section 269F permits an individual to apply to the Chief Executive Officer of Customs (the CEO) for a TCO concerning certain goods. If the CEO is satisfied that the application is not for goods specified in section 269SJ, which are ineligible for a TCO, the CEO must then determine if the application meets the core criteria. According to section 269C, the application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) stating that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as per section 269P(3).
The obligations imposed on parties by the Act include the requirement for applicants to ensure their applications are not for goods specified in section 269SJ. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per section 269K(1). If no submissions are received, the CEO can proceed to make the TCO. The Act ensures that a TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken before the TCO was registered, as stated in section 269S(1).
Breaches of the provisions outlined in the Customs Act 1901 may result in various civil or criminal consequences. For instance, knowingly making a false statement or providing misleading information in an application for a TCO could lead to criminal penalties, including fines and imprisonment. Specifically, under section 283 of the Act, a person who is found guilty of an offence related to making a false statement or providing misleading information may be subject to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, section 284A of the Act imposes penalties for non-compliance with administrative requirements, which may include fines or imprisonment, depending on the severity of the breach.