EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719054
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.
San Marino Smallgoods applied for a TCO in respect of certain meat washing machines on 8 November 2007.
Instrument
TCO No 0719054 was made on 29 January 2008. It declares that those certain meat washing 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. 0719054 is taken to have come into force on 8 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 Tariff Concession Order No. 0719054, enacted in 2008 as an instrument under the Customs Act 1901, was introduced to provide tariff concessions for certain meat washing machines. The Act, enacted by the Parliament of Australia, establishes a framework whereby the Chief Executive Officer of Customs can make Tariff Concession Orders, which result in a lower rate of customs duty for specified goods. The policy objective of this measure is to support industries by reducing the cost of importing specific goods that are not produced domestically, thereby facilitating trade and economic growth. San Marino Smallgoods applied for this concession on 8 November 2007, and the order was made on 29 January 2008, effective from the date of the application. This legislative instrument ensures that importers of these machines can benefit from the reduced duty rate of 5% and potentially apply for refunds on duties paid prior to the concession.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply to goods specified in the order and reduce the rate of customs duty. The Act applies to any person or entity seeking a reduction in customs duty on specific goods by applying for a TCO, provided the goods are not specified in section 269SJ, which lists those ineligible for a concession. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia, a criterion defined by sections 269C, 269D, 269E, and 269B. Once the core criteria are met, the CEO issues a written order, which applies from the date the application was lodged. This process does not disadvantage any person by affecting rights or imposing liabilities for actions taken before the TCO's effective date. Exemptions and exclusions are strictly defined within the Act, and the scope of the TCO can be further clarified or extended through subordinate instruments, although this specific instance did not involve any such extensions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0719054 under the Customs Act 1901 include section 269C, which outlines the core criteria for a Tariff Concession Order (TCO) to be considered valid, and section 269P(3), which mandates the Chief Executive Officer of Customs (CEO) to issue a written order if the application meets these criteria. Specifically, section 269C requires that, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a TCO declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
Under this legislation, the obligations and requirements imposed on the parties or entities it governs include the necessity for applicants to ensure their applications meet the core criteria set out in section 269C. This means demonstrating that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The CEO must also publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made. Additionally, the CEO must consider any submissions received and decide whether to issue the TCO based on whether the core criteria have been satisfied.
The Act also outlines specific offences, penalties, or civil/criminal consequences for breaches, although the explanatory statement does not detail specific penalties. Generally, under the Customs Act 1901, unauthorised importation or exportation of goods, or failure to comply with conditions attached to a TCO, could lead to penalties such as fines or imprisonment, depending on the severity of the breach. However, the Tariff Concession Instrument itself does not specify maximum penalties; these would typically be found in the broader Customs Act or related regulations. The Act ensures that the rights of importers are beneficially affected and that the TCO does not impose any liabilities on any person.