EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718291
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.
Nestle Australia Ltd applied for a TCO in respect of certain pet food vacuum core coating lines on 25 October 2007.
Instrument
TCO No 0718291 was made on 25 January 2008. It declares that those certain pet food vacuum core coating lines 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. 0718291 is taken to have come into force on 25 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 Parliament of Australia, establishes a framework for applying tariff concessions to imported goods, thereby addressing the gap in providing economic benefits to industries that lack domestic production capabilities. Specifically, the Act enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which reduce customs duty on specified imported goods, provided no substitutable goods are produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0718291 clarifies that this mechanism is designed to support industries by reducing their costs and enhancing their competitiveness, without disadvantaging other stakeholders. This instrument was introduced to facilitate the import of certain pet food vacuum core coating lines under a reduced duty rate, reflecting the policy objective of fostering industrial development and efficiency.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which can result in lower rates of customs duty for specified goods. A TCO can be applied for by any person, provided the goods in question do not fall under the restricted list specified in section 269SJ of the Act. If the CEO is satisfied that no substitutable goods are produced in Australia in the ordinary course of business, and the application meets the core criteria outlined in sections 269C, 269D, and 269E, a TCO will be made. This instrument affects industries and businesses involved in the importation of goods that may benefit from tariff concessions. The TCO applies across the Commonwealth of Australia and its territories, with no specific exclusions or exemptions mentioned in the explanatory statement. The scope of the Act can be extended or restricted through subordinate instruments, although such provisions are not detailed in this explanatory statement. Once a TCO is registered, it comes into force on the date the application was lodged, and it does not affect pre-existing rights or impose liabilities for actions taken before the registration date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0718291, as detailed in the Customs Act 1901, involve the establishment of a Tariff Concession Order (TCO) for specific pet food vacuum core coating lines (section 269F). The Chief Executive Officer of Customs (CEO) is tasked with deciding whether an application for a TCO meets the core criteria, which include the absence of substitutable goods produced in Australia at the time of application (sections 269C and 269P(3)). If the CEO is satisfied, a TCO is issued, and the goods in question are granted a lower rate of customs duty, in this case, free of charge (section 269P(3)).
The Act imposes certain obligations on both the CEO and the applicants. The CEO must ensure that the application is valid and meets the core criteria before issuing a TCO. This involves assessing whether substitutable goods are produced in Australia and whether the goods in question are eligible for a concession. The CEO is also required to publish a notice in the Gazette to invite submissions from any interested parties (subsection 269K(1)). On the other hand, applicants must provide sufficient evidence and information to demonstrate that their goods meet the criteria for a TCO. They must also respond to any inquiries or requests for further information from the CEO.
Failure to comply with the provisions of the Act can result in civil and criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can attract significant fines and potential imprisonment under the Customs Act 1901. The maximum penalties for such offences can vary, depending on the nature and severity of the breach, and may include substantial fines for individuals and corporate entities, along with possible imprisonment terms for serious or repeated offences. It is crucial for all parties involved to adhere to the obligations and requirements set forth by the Act to avoid these consequences.