EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716887
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.
Australian Paper applied for a TCO in respect of certain starch cookers on 5 October 2007.
Instrument
TCO No 0716887 was made on 14 December 2007. It declares that those certain starch cookers 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. 0716887 is taken to have come into force on 5 October 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 Tariff Concession Instrument No. 0716887 was enacted in 2007 under the Customs Act 1901 to address the need for a lower rate of customs duty on specific goods that are not produced domestically. This instrument was introduced to provide relief to importers by reducing the financial burden of customs duties on certain goods, thereby encouraging trade and potentially lowering consumer prices. The instrument was created following an application by Australian Paper for a tariff concession on certain starch cookers, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, satisfying the core criteria set out in section 269C of the Act. The instrument effectively declares that these starch cookers are subject to a free rate of duty, down from the general rate of 5%.
This instrument was enacted by the Australian Government to streamline the tariff concession process and provide clear guidelines for importers and manufacturers alike. The policy objective is to facilitate trade by making certain imported goods more affordable, thus supporting economic growth and consumer choice within Australia. The instrument does not impose any liabilities on individuals or entities and allows for duty refunds on imports since the date the instrument came into force, which is the same day the application was lodged, in line with the Customs Act.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity that seeks a tariff concession for imported goods, provided that the goods do not fall under the list specified in section 269SJ of the Act, which includes certain restricted items. The application process requires that, on the day the application is lodged, no substitutable goods are being produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. The CEO is mandated to consider the core criteria outlined in section 269C and, if satisfied, must issue a written order specifying the goods to which the concession applies. For instance, TCO No. 0716887 was made in respect of certain starch cookers, reducing their duty rate from 5% to free. This concession does not affect the rights of any person as at the date of registration, ensuring that no existing liabilities or disadvantages are imposed on anyone, except for potentially beneficial impacts on importers who can apply for duty refunds. The TCO's jurisdiction extends across Australia, and its application can be further extended or restricted through subordinate instruments.
Key Provisions
The main operative sections of the Customs Act 1901, specifically Part XVA, establish the framework for Tariff Concession Orders (TCOs). Under section 269F, a person may apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. The CEO must decide if the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order (section 269P(3)) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For instance, TCO No. 0716887, made on 14 December 2007, declared that certain starch cookers were subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO has a responsibility to assess applications for TCOs against the core criteria specified in section 269C. Once an application is accepted as valid, 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 (subsection 269K(1)). In the case of TCO No. 0716887, no submissions were received in response to this invitation. Additionally, under section 269S(1), a TCO is deemed to come into force on the day the application is lodged. For TCO No. 0716887, this date was 5 October 2007. Importers have the right to apply for a refund of duty on goods imported since the TCO's effective date, as stipulated under paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches of TCO provisions within the Act itself. However, the failure to comply with the statutory requirements for making a TCO or the improper application of a TCO could potentially lead to legal challenges or administrative actions. For example, if the CEO does not adhere to the mandated process for considering TCO applications, this could result in legal scrutiny or disputes. Additionally, any misuse of a TCO by an entity could lead to administrative penalties or corrective actions. While the Act does not detail maximum penalties, breaches of customs regulations generally attract significant fines and potential criminal charges under other sections of the Act.