EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718727
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.
Aqa Fresher Ltd applied for a TCO in respect of certain food processing system on 1 November 2007.
Instrument
TCO No 0718727 was made on 30 January 2008. It declares that those certain food processing 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. 0718727is 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 was enacted by the Australian Parliament to regulate the import and export of goods, including the imposition and collection of customs duties. The Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs to apply lower rates of customs duty to specified goods. This legislative framework was introduced to address the problem of ensuring that Australian businesses have access to competitively priced imported goods that are necessary for their operations, thus promoting economic efficiency and competitiveness. The policy objective is to facilitate the importation of goods that are not produced domestically or are not produced in sufficient quantities, thereby benefiting consumers and businesses alike. The Customs Act 1901, through its provisions on Tariff Concession Orders, seeks to balance the need for revenue generation through customs duties with the imperative of supporting Australia’s trade and industrial sectors by reducing the cost of essential imported goods.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods and result in the application of a lower rate of customs duty than the standard rate. The Act allows individuals or entities to apply for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. An application is considered valid if no substitutable goods, defined as those produced in Australia and suitable for the same use as the goods in question, are produced in the ordinary course of business. The Chief Executive Officer must make a written TCO if the application meets these criteria. The TCO process also requires consultation, with a notice published in the Gazette inviting submissions on the application, though in the case of TCO No. 0718727, no submissions were received. The TCO becomes effective from the date the application was lodged, without affecting any existing rights or imposing new liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The main operative sections of this legislation, particularly section 269C, 269P(3) and 269K(1) of the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs). Section 269C stipulates that a TCO application meets core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that an application meets these criteria, they must issue a written order (TCO) specifying the applicable item of the Customs Tariff Act 1995. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the making of the TCO. In this case, the CEO did not receive any submissions in response to the notice for TCO No. 0718727.
The obligations imposed on parties by this Act include the requirement for applicants to ensure that their TCO applications meet the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia. Additionally, the CEO is obligated to review applications, decide whether they meet the criteria, and if so, issue a written TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, as per section 269K(1). Furthermore, the CEO must ensure that the rights of persons are not adversely affected by the TCO, and that no liabilities are imposed on persons in respect of actions taken prior to the TCO's registration.
Sections 269F and 269SJ of the Customs Act 1901 outline the process for applying for a TCO and specify that certain goods cannot be subject to a TCO. Any breaches of these provisions, such as incorrectly claiming that no substitutable goods were produced in Australia when this is not the case, may lead to the CEO not issuing the TCO. Additionally, if a TCO is issued improperly, it could lead to legal challenges or other consequences for those involved. Under the Customs Act 1901, penalties for incorrect or fraudulent applications may include fines or imprisonment, depending on the severity of the offence. The exact penalties would be determined based on the specific circumstances and any additional laws that apply.