EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720624
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.
Tetra Pak Marketing Pty Ltd applied for a TCO in respect of certain whey separator parts on 03 December 2007.
Instrument
TCO No 0720624 was made on 29 February 2008. It declares that those certain whey separator 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. 0720624 is taken to have come into force on 03 December 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, enacted by the Australian Parliament, governs the administration of customs duties and other import and export-related matters. The Act includes provisions for Tariff Concession Orders (TCOs), which can be applied for by individuals or businesses seeking a reduction in customs duty on certain imported goods. The introduction of Part XVA within the Act addressed the need for a streamlined process to provide tariff concessions, ensuring that the Australian market could access competitively priced goods without undue administrative burden. This mechanism aims to foster fair trade practices by allowing the Chief Executive Officer of Customs to assess applications against specified criteria, particularly ensuring that the concession does not displace domestic production. Tariff Concession Instrument No. 0720624, made in 2008, exemplifies this process by granting a tariff concession on specific whey separator parts, reducing the duty from 5% to free, and thereby facilitating the import of these goods into Australia.
Scope and Application
The Tariff Concession Instrument No. 0720624 under the Customs Act 1901 applies to the specific goods, in this case, certain whey separator parts, that are subject to a Tariff Concession Order (TCO). These goods are eligible for a TCO if they meet the core criteria set out in the Act, primarily that no substitutable goods are produced in Australia in the ordinary course of business at the time the application was lodged. The Act applies to any person or entity that seeks to avail themselves of the tariff concessions by applying for a TCO, and it is administered by the Chief Executive Officer of Customs (CEO). The geographic scope of the Act is national, applying across all states and territories of Australia, as it is a Commonwealth Act. However, the application of the TCO is limited to the specific goods for which it was made and does not extend to other goods unless a separate TCO is issued for those goods. The Act does not specify exclusions, but it does exclude certain goods listed in section 269SJ of the Act that cannot be subject to a TCO. The application and scope of the Act may be extended or restricted through subordinate instruments, such as regulations or further legislative amendments, which can provide additional definitions or criteria relevant to the application of tariff concessions.
Key Provisions
The Tariff Concession Order (TCO) No. 0720624, made under section 269F of the Customs Act 1901, provides a tariff concession for certain whey separator parts. Specifically, section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application for a TCO meets the core criteria, they must issue a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The general rate of duty for these goods is 5%, but the TCO sets this rate to free.
The Act imposes several obligations and requirements on the parties involved. Firstly, applicants must ensure that their TCO applications comply with section 269C, which stipulates that no substitutable goods were produced in Australia on the date the application was lodged. Furthermore, the CEO has a duty under section 269K(1) to publish a notice in the Gazette inviting any interested parties to lodge submissions opposing the TCO if they believe there are valid reasons why it should not be granted. In this instance, the CEO did not receive any submissions, indicating no objections were raised against the concession.
Failure to comply with the provisions of the Customs Act 1901 and associated regulations could lead to various consequences. For example, if an entity does not adhere to the conditions set by a TCO or attempts to circumvent the tariff concessions, they could face legal action. The specific penalties for breaches are not detailed in the explanatory statement but typically include fines and potential criminal charges under the relevant sections of the Customs Act. Additionally, any person found to be intentionally misleading the CEO in an application for a TCO could be subject to significant civil or criminal penalties as prescribed by the Act.