EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718726
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.
Tuscany Farms Pty Ltd applied for a TCO in respect of certain layer cage battery system on 1 November 2007.
Instrument
TCO No 0718726 was made on 16 January 2008. It declares that those certain layer cage battery system 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. 0718726 is taken to have come into force on 1 November 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 Commonwealth Parliament, provides a framework for administering tariffs and duties on imported goods. Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aiming to provide tariff relief for certain goods under specific conditions. This legislative instrument was introduced to address the need for targeted tariff concessions that benefit Australian importers by reducing or eliminating customs duty on specific goods, provided no substitutable goods are produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0718726, enacted on 16 January 2008, details a concession made for certain layer cage battery systems, which now attract a duty rate of free instead of the general rate of 5%, effective from the date of the application, 1 November 2007. The policy objective is to facilitate smoother importation of these goods, benefiting the relevant industry by lowering import costs.
Scope and Application
The Tariff Concession Instrument No. 0718726 under the Customs Act 1901 applies to a specific set of goods, in this case, certain layer cage battery systems, and is directed towards entities such as Tuscany Farms Pty Ltd, which applied for the concession. The application of this instrument is limited to goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a Tariff Concession Order (TCO). The geographic reach of this legislation is national, as it pertains to the importation of goods into Australia and the associated customs duties managed by the Commonwealth through the CEO of Customs. The TCO provides for a reduced customs duty rate from the general 5% to free for the specified goods, provided that no substitutable goods are produced in Australia. The application process and the criteria for concession are strictly outlined in the Act, with the CEO required to assess whether the core criteria are met before making a decision. The instrument does not affect existing rights or impose liabilities on any person in respect of actions taken before its registration, and it provides for potential duty refunds for importers of the specified goods from the date the TCO is deemed to have come into force.
Key Provisions
The Tariff Concession Instrument No. 0718726, under the Customs Act 1901, applies specifically to certain layer cage battery systems. Section 269F (1) allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), which if granted, would apply a lower rate of customs duty to the specified goods. This application process begins when a person submits a request to the CEO under section 269F (1), and the CEO must determine if the application meets the core criteria as outlined in section 269C. The core criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in section 269E. If the CEO is satisfied that these criteria are met, a written order, the TCO, is made under section 269P (3) that specifies the reduced duty on the goods.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess applications against the core criteria and to ensure that the goods in question are not substitutable by any goods produced in Australia. Section 269K (1) mandates the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Although no submissions were received in response to the notice for TCO No. 0718726, the process ensures transparency and allows for any objections to be considered. The CEO's decision to grant the TCO signifies that the layer cage battery systems in question are not substitutable by any Australian-produced goods and are therefore eligible for the tariff concession.
Failure to comply with the provisions of the Customs Act 1901 or with any TCO may lead to various consequences. For instance, incorrect classification of goods or non-compliance with the terms of a TCO may result in legal penalties. The specific penalties for breaches of customs laws are detailed in other sections of the Act and may include fines and imprisonment. However, the explanatory statement does not detail specific maximum penalties for this particular TCO. It is essential for the parties involved to adhere to the terms of the TCO and the Act to avoid any legal repercussions.