EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718848
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.
Lachlan Produce (Aust) Pty Ltd applied for a TCO in respect of certain vegetable and/or fruit weighing machines on 2 November 2007.
Instrument
TCO No 0718848 was made on 30 January 2008. It declares that those certain vegetable and/or fruit weighing machines 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. 0718848 is taken to have come into force on 2 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 peron 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, facilitates the establishment of Tariff Concession Orders (TCOs) through Part XVA. This legislative mechanism allows the Chief Executive Officer of Customs to reduce customs duty rates on specific goods, provided certain criteria are met. The problem this legislative framework addresses is the need to provide tariff relief to importers of goods for which no locally produced substitutes are available, thereby supporting Australian industries that do not produce these goods domestically. The policy objective of the TCO system is to encourage trade by reducing the cost of imported goods, while also protecting local industries from undue competition. This is achieved by ensuring that TCOs are only granted when no substitutable goods are produced in Australia in the ordinary course of business. The instrument in question, Tariff Concession Instrument No. 0718848, was introduced to provide a tariff concession for certain vegetable and/or fruit weighing machines, which now enjoy a duty-free status as of the application date of 2 November 2007.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) which can result in a lower rate of customs duty for specified goods. This legislation applies to any person who can apply for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act which lists goods ineligible for a TCO. The CEO must assess whether the application meets the core criteria, which are outlined in sections 269C, 269B, and 269D of the Act, particularly focusing on whether substitutable goods are produced in Australia. If these criteria are met, the CEO is mandated to issue a TCO. The scope of this legislation is national, impacting all entities and individuals involved in the importation of the specified goods across Australia. It is noteworthy that TCOs are not retrospective; they do not affect the rights of any person as at the date of registration nor impose liabilities on any person in respect of actions taken before the registration date. The instrument in question, TCO No. 0718848, pertains to certain vegetable and/or fruit weighing machines and came into force on 2 November 2007, the date the application was lodged.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods (s 269F). An application for a TCO can be submitted by any person, and if the CEO determines that it pertains to goods not excluded under section 269SJ, they must assess whether it meets the core criteria (s 269C). A TCO application meets these criteria if, on the date of application, there are no substitutable goods produced in Australia in the ordinary course of business (s 269C, 269D, 269E). If satisfied, the CEO issues a written order specifying the goods and the applicable tariff item (s 269P(3)).
In the case of TCO No. 0718848, Lachlan Produce (Aust) Pty Ltd applied for tariff concessions on certain vegetable and fruit weighing machines on 2 November 2007. The CEO issued this TCO on 30 January 2008, declaring that the specified machines are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, down from the general rate of 5%. The TCO came into effect on the date of the application, 2 November 2007, and does not affect pre-existing rights or impose liabilities on anyone except the Commonwealth (s 269S(1)). Importers of these goods can apply for a refund of duties paid since the TCO's effective date (Reg 126(1)(r)).
The CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit objections (s 269K(1)). In this instance, no submissions were received in response to the notice for TCO No. 0718848. The TCO does not adversely affect the rights of any person other than the Commonwealth and imposes no liabilities on anyone (s 269S(1)).
The Act imposes obligations on applicants to ensure their applications meet the core criteria and on the CEO to assess these applications and publish notices in the Gazette. The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities. Failure to comply with these requirements may result in legal consequences. The specific offences and penalties are not detailed in the explanatory statement, but breaches of customs laws can generally lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach.