EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721824
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.
Mars Australia Pty Ltd applied for a TCO in respect of certain volumetric filling machine on 18 December 2007.
Instrument
TCO No 0721824 was made on 07 March 2008. It declares that those certain volumetric filling 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. 0721824 is taken to have come into force on 18 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 was enacted to regulate the importation and exportation of goods within Australia. It provides a framework for administering customs duties and tariffs on goods entering and leaving the country. The Act was introduced to address the need for a structured and systematic approach to customs duties, thereby facilitating trade while also protecting domestic industries by regulating the flow of goods across the border. The Customs Act 1901 is administered by the Parliament of Australia, with the aim of ensuring that the customs system supports the economic and fiscal policies of the nation. The Tariff Concession Instrument No. 0721824, made under this Act, was introduced to provide tariff concessions on specific goods, such as the volumetric filling machines applied for by Mars Australia Pty Ltd, ensuring that these goods are not subject to the general rate of duty, thereby benefiting importers and potentially stimulating economic activity.
Scope and Application
The Tariff Concession Instrument No. 0721824, issued under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs (CEO). This legislation is pertinent to any person or entity that imports goods that are subject to the TCO, particularly in cases where the goods are not produced domestically and no suitable substitute is available in Australia. The TCO benefits importers by allowing them to claim a refund of duty on goods imported since the TCO's effective date, thereby reducing the financial burden associated with customs duties. The instrument extends its application across the Commonwealth of Australia, impacting trade practices and duties related to the specified goods. However, it does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken before the TCO's registration. The scope of this legislation is further managed through subordinate instruments, which may specify additional details or conditions regarding the application and enforcement of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to this Tariff Concession Order (TCO) are sections 269C, 269F, 269P, and 269SJ (subsection 269K(1) also plays a role in the process). Section 269F allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application is not in relation to goods specified in section 269SJ and that the application meets the core criteria set out in section 269C, the CEO is required to issue a written order (the TCO) as specified in section 269P(3). This TCO will then apply to the goods from the date the application was lodged, as per section 269S(1). Additionally, subsection 269K(1) mandates the CEO to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO if they believe it should not be made.
The obligations and requirements imposed by the Act on the parties involved primarily pertain to the application process and the CEO’s responsibilities. The applicant, in this case, Mars Australia Pty Ltd, must submit a valid application to the CEO for a TCO, ensuring that the goods in question do not fall under the prohibited category specified in section 269SJ. The CEO, on receiving a valid application, must conduct a review to determine whether the core criteria outlined in section 269C are met. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. Once the CEO is satisfied that the application meets the criteria, a TCO must be issued as per section 269P(3). Furthermore, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application, inviting any interested parties to lodge submissions if they believe the TCO should not proceed.
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for failing to comply with the requirements of the TCO or for non-compliance with the Act. However, it is implied that any breach of the provisions could potentially lead to legal consequences, such as challenges to the validity of the TCO or disputes over the application of customs duties. The Act itself, while not detailing specific penalties in this context, would generally provide for enforcement actions against non-compliance with customs regulations. For example, under the Customs Act 1901, penalties for non-compliance can include fines and, in some cases, imprisonment, though these are not specified in the explanatory statement for this particular TCO.