EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719399
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.
Unilever Australia Limited applied for a TCO in respect of certain detergent capping filling machine parts on 13 November 2007.
TCO No 0719399 was made on 30 January 2008. It declares that those certain detergent capping filling machine parts 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. 0719399 is taken to have come into force on 13 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 Instrument No. 0719399, made under the Customs Act 1901, was enacted in 2008 to provide tariff concessions on certain goods, specifically detergent capping filling machine parts. This legislation was introduced to address the gap in providing duty relief for imported goods that are not produced in Australia and for which there are no substitutable domestic alternatives. The instrument was developed in response to an application from Unilever Australia Limited, seeking tariff concessions for specific machine parts. The policy objective of this instrument is to facilitate the importation of goods by reducing the customs duty, thereby encouraging trade and potentially lowering costs for businesses importing these specific parts. The instrument was enacted by the Chief Executive Officer of Customs, following the provisions outlined in the Customs Act 1901, and does not disadvantage any person other than the Commonwealth by affecting their rights as at the date of registration.
Scope and Application
The Tariff Concession Instrument No. 0719399 under the Customs Act 1901 applies to the goods specified in the instrument, which in this case are certain detergent capping filling machine parts. The Act allows for the application of lower rates of customs duty on goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. The application process is governed by section 269F, where an applicant must satisfy the CEO that the goods in question are eligible for tariff concessions, specifically that no substitutable goods are produced in Australia in the ordinary course of business as per section 269C. The TCO applies nationwide, across the Commonwealth of Australia, affecting all entities involved in the importation of the specified goods. The legislation excludes certain goods as per section 269SJ, which lists items that cannot be subject to a TCO. The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities; however, it provides benefits such as the potential for duty refunds to importers under Regulation 126(1)(r). The commencement date of the TCO is the day the application was lodged, 13 November 2007, and it is effective as of that date.
Key Provisions
Section 269C of the Customs Act 1901 sets out the core criteria that must be satisfied for a Tariff Concession Order (TCO) to be made. To qualify, the goods in question must not have any substitutable goods produced in Australia on the date the application for the TCO was lodged. A TCO application is one that the Chief Executive Officer of Customs (CEO) must consider if it does not pertain to goods specified in section 269SJ of the Act, which are goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This is clearly stated in section 269P(3) of the Act.
Under section 269K(1) of the Customs Act 1901, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application. This notice includes an invitation for any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. In the case of TCO No 0719399, the CEO did not receive any submissions in response to this invitation, which indicates that there were no objections to the concession being granted. The TCO is to be taken to have come into force on the day on which the application for the TCO was lodged, as per subsection 269S(1) of the Act. Therefore, TCO No. 0719399 is taken to have come into force on 13 November 2007.
The obligations imposed by the Customs Act 1901 on parties applying for a TCO are primarily centred around ensuring that the application meets the core criteria outlined in section 269C. The applicant must demonstrate that no substitutable goods were produced in Australia on the date the application was lodged. The CEO has a duty to review the application and, if satisfied that the core criteria are met, to make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as mandated by section 269K(1) of the Act.
Breaches of the provisions of the Customs Act 1901 relating to Tariff Concession Orders can result in various penalties and consequences. Although the explanatory statement does not detail specific penalties, the general penalties for breaches of the Customs Act 1901 can include fines and imprisonment, as per the relevant sections of the Act. For instance, under section 236 of the Act, an offence involving fraud or knowingly making a false statement can result in a penalty of up to 10 years imprisonment or a fine, or both. For civil penalties, the Act provides for financial penalties for non-compliance with its provisions. These penalties can be substantial and are intended to ensure adherence to the legal framework governing tariff concessions.