EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802632
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 Australasia applied for a TCO in respect of certain freezing tunnels on 14 February 2008.
Instrument
TCO No 0802632 was made on 28 April 2008. It declares that those certain freezing tunnels 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. 0802632 is taken to have come into force on 14 February 2008.
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, provides for the establishment of a tariff concession scheme through which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) to reduce customs duties on certain goods. This legislative framework was introduced to address the need for a mechanism that allows for the reduction of customs duties on specific goods that meet certain criteria, particularly where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0802632, made under this Act, aims to provide a tariff concession for certain freezing tunnels applied for by Unilever Australasia on 14 February 2008. The instrument declares that these freezing tunnels are subject to a zero percent duty rate, down from the general rate of 5%, and became effective from the date the application was lodged, thereby benefiting importers by potentially allowing them to claim refunds on duties paid prior to the instrument's effective date.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the application of Tariff Concession Orders (TCOs), which can be initiated by any person seeking to reduce the customs duty on certain goods. This Act applies to individuals and entities seeking to import goods that are eligible for a reduced tariff rate under a TCO. The Chief Executive Officer of Customs is responsible for assessing applications to ensure they meet the core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The Act applies nationally across Australia and its scope can be extended through subordinate instruments. Notably, certain goods specified in section 269SJ of the Act cannot be subject to a TCO. Once a TCO is granted, it applies from the date the application was lodged, and it benefits importers by allowing them to apply for a refund of duty paid on those goods prior to the TCO’s effective date. The application process requires the CEO to publish a notice in the Gazette, inviting public submissions, although no submissions were received for the specific TCO in question.
Key Provisions
The main operative sections of the Customs Act 1901, as applied through Tariff Concession Order No. 0802632, involve provisions related to the application and grant of Tariff Concession Orders (TCOs) for certain goods, specifically freezing tunnels in this instance. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided that the goods in question are not those specified in section 269SJ, which are ineligible for such concessions. The CEO must assess whether the application meets the core criteria outlined in section 269C, which is satisfied if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO is required to issue a written TCO under section 269P(3), specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the associated duty rate set forth in the order.
The obligations and requirements imposed by the Act on the parties involved are primarily administrative and procedural. The CEO must, upon receiving a valid TCO application, ensure that the application complies with the exclusions in section 269SJ and meets the core criteria in section 269C. If these conditions are satisfied, the CEO must promptly issue a TCO. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO. This ensures transparency and allows for any objections to be heard before the TCO is granted. In this case, no submissions were received in response to the notice published by the CEO.
The Act also outlines the consequences for any breach of its provisions or the terms of a TCO. While the explanatory statement does not specify particular offences or penalties related to the issuance of TCOs, general provisions within the Customs Act 1901 and related regulations may apply. These could include penalties for non-compliance with customs regulations, which can range from fines to more severe criminal sanctions depending on the nature and severity of the breach. The specific penalties would be determined based on the relevant sections of the Act and any applicable regulations. Importantly, the TCO itself does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration, except to the beneficial effect of the importers who can apply for a refund of duty on goods imported since the TCO came into force.