EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716959
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 Pty Ltd applied for a TCO in respect of certain food emulsifiers on 08 October 2007.
Instrument
TCO No 0716959 was made on 31 January 2008. 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. 0716959 is taken to have come into force on 08 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 Customs Act 1901, enacted by the Australian Parliament, addresses the need for a streamlined process to provide tariff concessions on certain goods. This Act, specifically under Part XVA, enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that lower the rate of customs duty for specified goods. A TCO application process is available for those seeking to reduce the customs duty on goods not specified in section 269SJ, which outlines goods ineligible for concession. The policy objective is to facilitate economic efficiency by allowing lower tariff rates when no substitutable goods are produced in Australia, as outlined in section 269C. The Tariff Concession Instrument No. 0716959, made on 31 January 2008, exemplifies this process, granting a TCO to Danisco Australia Pty Ltd for certain food emulsifiers, reducing the duty rate from 5% to free, effective from the application date on 08 October 2007. This TCO was made following a determination that no substitutable goods were produced in Australia, and no objections were received during the consultation period.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0716959, applies to individuals and entities seeking tariff concessions for specific goods imported into Australia. The Act permits the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) for goods not produced in Australia, thereby applying a reduced or free rate of customs duty. The Act is applicable on a national level, with the CEO's decisions impacting importers across the Commonwealth. The TCO No. 0716959 specifically applies to certain food emulsifiers, where the general duty rate of 5% is reduced to free under the prescribed item of Schedule 4 to the Customs Tariff Act 1995. This legislation does not apply to goods specified in section 269SJ of the Customs Act 1901, which lists items ineligible for tariff concessions. The CEO must ensure that the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia. The TCO does not impose any liabilities on persons other than the Commonwealth and does not affect pre-existing rights adversely. The commencement date of the TCO is considered from the date the application was lodged, providing immediate benefits to importers eligible for duty refunds.
Key Provisions
The main sections of Tariff Concession Instrument No. 0716959 under the Customs Act 1901 include section 269C, which specifies the core criteria for making a Tariff Concession Order (TCO). According to section 269C, a TCO application will meet these criteria if, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided these goods are not listed in section 269SJ, which sets out goods that cannot be subject to a TCO. Once the CEO determines that the application meets the core criteria, they must make a written TCO order, as outlined in section 269P(3). This order specifies that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a lower rate of customs duty.
The obligations imposed by the Act on the parties involved primarily concern the CEO of Customs. Once a valid TCO application is received, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as stipulated in section 269K(1). If no submissions are received, the CEO proceeds to make the TCO, ensuring it complies with the criteria set out in section 269C. The Act also mandates that the TCO does not affect the rights of any person as of the date of registration in a way that disadvantages them or imposes liabilities, as stated in section 269S(1). This means that any rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
In terms of consequences for breach, the Act does not explicitly outline criminal or civil penalties for failing to comply with the requirements of a TCO. However, non-compliance with the provisions of the Customs Act 1901 or related regulations could lead to penalties under other sections of the Act. For example, section 185 of the Customs Act 1901 imposes penalties for knowingly making a false statement or representation in connection with any matter under the Act, with potential fines of up to $22,200 for individuals and $111,000 for corporations, depending on the severity of the offence. The Act also includes provisions for administrative penalties and legal action in cases of non-compliance, which may include fines or other corrective measures as deemed appropriate by the relevant authorities.