EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803430
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.
Convenience Food Systems International B.V applied for a TCO in respect of certain forming plates on 29 February 2008.
Instrument
TCO No 0803430 was made on 09 May 2008. It declares that those certain forming plates 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. 0803430 is taken to have come into force on 29 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 a framework for the regulation of imports and exports through the imposition of customs duties. The Act was introduced to address the need for structured and systematic governance of trade through customs, ensuring revenue collection and the enforcement of trade regulations. One particular feature of the Act is the establishment of Tariff Concession Orders (TCOs) under Part XVA, which allows for the application of lower rates of customs duty on specific goods, provided certain criteria are met. This mechanism aims to foster fair trade practices by ensuring that Australian industries are not unduly burdened by high customs duties on goods for which suitable local alternatives do not exist. The policy objective behind TCOs is to support Australian industries by reducing the cost of imported materials, thereby encouraging manufacturing and reducing reliance on foreign goods where local production is not viable.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the concession of tariffs on certain goods through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. This process allows for a lower rate of customs duty on goods specified in a TCO, provided that no substitutable goods are produced in Australia at the time of application. The legislation applies to any person or entity seeking a tariff concession for specific goods, ensuring that the application complies with the criteria outlined in sections 269C, 269D, 269E, and 269SJ of the Act. The scope of the legislation is national, extending across the Commonwealth of Australia. Notably, the Act excludes certain goods that cannot be subject to a TCO, as detailed in section 269SJ. The application of the Act can be extended or clarified through subordinate instruments, such as regulations or further orders, which may specify additional criteria or conditions for TCO applications. The commencement of a TCO is deemed to occur on the date the application is lodged, and it does not affect the rights of any person other than the Commonwealth in relation to actions taken before the registration date.
Key Provisions
The Tariff Concession Instrument No. 0803430 under the Customs Act 1901 (section 269F) allows for the application of lower rates of customs duty on specific goods through Tariff Concession Orders (TCOs). A TCO application must be made by a person to the Chief Executive Officer of Customs (CEO) (section 269C), provided the goods in question are not excluded by section 269SJ. The CEO must assess whether the application meets the core criteria, which include ensuring no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If satisfied, the CEO issues a written order, specifying the lower rate of duty applicable to the goods in question (section 269P(3)). For instance, in TCO No. 0803430, the general rate of duty on certain forming plates is 5%, but the TCO reduces this to free.
Entities or individuals seeking a TCO must comply with the procedural requirements set out in the Customs Act 1901. This includes ensuring that the application is lodged with the CEO and that all necessary information is provided to demonstrate that the goods in question meet the criteria for a concession (section 269K(1)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received (section 269K(1)). Furthermore, the CEO must ensure that the application does not relate to goods excluded under section 269SJ, and that the goods are not substitutable by Australian-produced alternatives (section 269D, 269E, and 269B).
Breach of the provisions under the Customs Act 1901 related to TCOs can lead to significant legal consequences. While the explanatory statement does not explicitly detail specific offences or penalties, violations of customs regulations typically incur substantial penalties. Under the Customs Act 1901, offences can include fines, imprisonment, or both, depending on the severity of the breach. The maximum penalties can vary widely, but they may include fines up to a certain amount or imprisonment for several years, or both, as prescribed under other sections of the Act. Ensuring compliance with the TCO provisions is therefore critical to avoid these severe repercussions.