EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720282
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.
Parmalat Australia Ltd applied for a TCO in respect of certain foodstuff filling and sealing machine on 27 November 2007.
Instrument
TCO No 0720282 was made on 29 February 2008. It declares that those certain foodstuff filling and sealing 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. 0720282 is taken to have come into force on 27 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 Parliament of Australia to facilitate the administration of customs and excise duties, among other purposes. Part XVA of the Act establishes a scheme for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs (the CEO) to lower the rate of customs duty on specified goods. This mechanism was introduced to address the need for tariff relief for imported goods that are not produced domestically or do not have suitable substitutable goods produced in Australia. In line with the Act, the CEO must ensure that the application for a TCO meets certain core criteria, such as the absence of substitutable goods produced in Australia. Following Parmalat Australia Ltd’s application for a TCO in respect of certain foodstuff filling and sealing machines, Tariff Concession Order No. 0720282 was issued on 29 February 2008, reducing the duty rate from the general 5% to free. This order was published in the Gazette with no objections received, and it came into effect on the date of application, 27 November 2007. The order ensures that importers of these goods can apply for a refund of duty from the date the TCO was taken to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0720282 under the Customs Act 1901 applies to goods specified in the order, namely certain foodstuff filling and sealing machines. This legislation is intended to provide tariff concessions for these particular goods, enabling them to be imported into Australia without incurring the general customs duty rate. The instrument is applicable to entities involved in the importation of these goods, thereby potentially reducing the financial burden on businesses that require these specific machines. The geographic and jurisdictional reach of this Act is national, applying across all states and territories of Australia. Notably, the Act does not specify any exclusions or exemptions apart from those detailed in section 269SJ of the Customs Act 1901, which outlines goods that cannot be subject to a TCO. The application process and decision-making authority lie with the Chief Executive Officer of Customs, who must ensure the application meets the core criteria set out in the Act. This instrument extends the application of the Customs Act by providing a specific order for tariff concessions, thereby illustrating how the primary Act is supplemented through subordinate instruments to address particular trade needs.
Key Provisions
The Customs Act 1901 includes provisions for Tariff Concession Orders (TCOs) under section 269F, which allow for a lower rate of customs duty on specified goods. If a person applies for a TCO under section 269F and the application is not in respect of goods specified in section 269SJ, the Chief Executive Officer of Customs (CEO) must consider whether the application meets the core criteria as outlined in section 269C. This involves determining if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods in question are subject to the TCO.
Entities and individuals governed by this legislation are required to ensure that any applications for TCOs are made in accordance with the provisions set forth in sections 269C and 269F of the Customs Act 1901. The CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made, as stipulated in section 269K(1). Failure to comply with these requirements may result in the application not being processed appropriately.
There are no specific offences, penalties, or consequences mentioned in the explanatory statement for breaches of the TCO provisions. However, if the CEO determines that a TCO application does not meet the core criteria, the application would not be processed, and the goods would not receive the tariff concession. The TCO does not affect any existing rights or impose new liabilities on individuals or entities other than the Commonwealth, ensuring that those importing the goods can apply for a refund of duty on goods imported since the TCO came into force.