EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717301
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.
J.L. Lennard Food Equipment Pty Limited applied for a TCO in respect of certain pizza delivery bag induction heaters on 10 October 2007.
Instrument
TCO No 0717301 was made on 30 January 2008. It declares that those certain pizza delivery bag induction heaters 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. 0717301 is taken to have come into force on 10 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. 0717301, enacted in 2008 under the Customs Act 1901, addresses the need for a streamlined process to provide tariff concessions on specific goods. This instrument was introduced to facilitate the application for Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on particular items, thus supporting Australian businesses by lowering import costs and making goods more competitive. The Customs Act 1901, administered by the Parliament of Australia, empowers the Chief Executive Officer of Customs to make these orders, provided the application meets the core criteria established by the Act. The primary policy objective is to ensure that such tariff concessions are granted in a manner that supports economic efficiency and fairness in the Australian market, while also ensuring transparency through public consultation processes.
Scope and Application
The Tariff Concession Order No. 0717301, made under the Customs Act 1901, applies to the importation of certain pizza delivery bag induction heaters. This Act allows for the reduction or exemption of customs duties on specific goods, provided they meet certain criteria. The application process involves the Chief Executive Officer of Customs determining whether the goods for which a tariff concession is sought are not substitutable by products manufactured within Australia. If the CEO is satisfied that no such Australian-made alternatives exist, they must proceed to issue a Tariff Concession Order, as was done in this instance, reducing the duty on the specified goods from the general rate of 5% to free. This legislative measure is designed to benefit importers by potentially lowering the cost of importing these specific goods into Australia, thereby encouraging trade and possibly enhancing competitiveness in relevant industries. The Act applies nationally, across the Commonwealth, and its application is not restricted by state or territory boundaries.
The scope of this legislation extends to any person or entity involved in the importation of the specified goods, aiming to streamline and potentially reduce the financial burden associated with customs duties. The exclusions under this Act pertain to goods specified in section 269SJ, which cannot be subject to a Tariff Concession Order. Additionally, the Act does not retroactively affect the rights of any person, ensuring that it does not impose liabilities or disadvantages on those who may have imported the goods prior to the order's effective date. This ensures that the implementation of the Tariff Concession Order does not adversely affect past transactions or impose new obligations on importers retrospectively.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0717301, establish the conditions under which Tariff Concession Orders (TCOs) can be made, as well as the requirements and processes involved in applying for such orders. Section 269F of the Customs Act 1901 permits an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods, provided those goods are not excluded by section 269SJ. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Additionally, section 269P(3) mandates that if the CEO is satisfied the application meets these criteria, they must issue a written TCO. The instrument TCO No. 0717301, made on 30 January 2008, exemplifies this process by declaring certain pizza delivery bag induction heaters as subject to a TCO, resulting in a reduced rate of duty.
The Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, applicants must ensure that their goods do not fall under the exclusions specified in section 269SJ and that their applications meet the core criteria outlined in section 269C. The CEO must also follow the stipulated process, including considering any submissions received within the timeframe provided by section 269K(1). In the case of TCO No. 0717301, the CEO published a notice in the Gazette inviting submissions but received none. Moreover, the CEO must verify that no substitutable goods were produced in Australia in the ordinary course of business before issuing the TCO, as per section 269P(3).
Failure to comply with the provisions of the Customs Act 1901 or the terms of a TCO may result in various civil and criminal consequences. While the explanatory statement does not explicitly outline specific penalties for breaches, the general legal framework suggests that non-compliance could lead to fines or other penalties as determined by the relevant authorities. For instance, the CEO might impose administrative penalties for incorrect declarations or fraudulent applications, and more severe penalties could apply under broader criminal law provisions for wilful or negligent breaches that cause significant harm or loss.
The TCO No. 0717301, as declared on 30 January 2008, came into force on the date of application, 10 October 2007, as per subsection 269S(1). This means that the tariff concessions became effective from that date, benefiting importers by potentially allowing them to claim refunds on duties paid on the specified goods since that effective date. The TCO does not impose any liabilities on any person, as confirmed by the explanatory statement, and does not affect the rights of any person other than the Commonwealth concerning actions taken prior to the registration of the TCO.