EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803930
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.
IMI Cornelius Australia Pty Limited applied for a TCO in respect of certain frozen carbonated beverage dispensers on 12 March 2008.
Instrument
TCO No 0803930 was made on 30 May 2008. It declares that those certain frozen carbonated beverage dispensers 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. 0803930 is taken to have come into force on 12 March 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 Tariff Concession Order No. 0803930, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods to encourage economic efficiency and trade. This legislation was introduced to provide relief on customs duties for certain goods by reducing the duty rates, thus fostering better trade practices and economic growth. The enacting body, the Parliament of Australia, established this framework to streamline the application process for tariff concessions through the Chief Executive Officer of Customs, ensuring that the process is transparent and accessible. The policy objective is to support Australian businesses by making imported goods more affordable and competitive within the domestic market, without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0803930, made under section 269F of the Customs Act 1901, applies to the Chief Executive Officer of Customs and any entity or individual applying for a Tariff Concession Order (TCO) concerning specific goods. The Act facilitates the application for tariff concessions for goods that are not produced in Australia and for which substitutable goods are not manufactured domestically. This process ensures that importers can benefit from a lower rate of customs duty on the specified goods, which, in this case, are certain frozen carbonated beverage dispensers. The geographic and jurisdictional reach of this legislation is federal, extending across Australia in accordance with the provisions of the Customs Act 1901. The TCO exempts the goods it applies to from the general duty rate, instead subjecting them to a free rate of duty. The instrument does not affect any existing rights or liabilities of parties other than the Commonwealth, ensuring that the transition to the new duty rate does not disadvantage anyone who has already imported or intended to import the goods prior to the TCO's effective date. The TCO becomes effective on the date the application is lodged, which, in this instance, is 12 March 2008, and no exclusions or exemptions apply beyond the criteria outlined in the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The main operative sections of this legislation (F2008L02113) revolve around the establishment and implementation of a Tariff Concession Order (TCO) as outlined in the Customs Act 1901. Section 269F of the Act allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO on specific goods. If the CEO determines that the application does not pertain to goods listed in section 269SJ, they must then evaluate whether the application meets the core criteria as specified in section 269C. According to section 269C, an application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269D and 269E, which detail the meanings of "goods produced in Australia" and "ordinary course of business" respectively. If the CEO is satisfied that these conditions are met, they must make a written TCO order, as stated in subsection 269P(3).
The obligations imposed by this Act on the parties it governs are primarily procedural. The CEO is required to process TCO applications in accordance with the criteria set out in the Act. This includes ensuring that any application not pertaining to goods listed in section 269SJ is assessed against the core criteria of section 269C. If these criteria are satisfied, the CEO must issue a TCO. Additionally, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission, as stipulated in subsection 269K(1). The Act ensures that the rights of persons (other than the Commonwealth) are not adversely affected by the issuance of a TCO.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly outline specific criminal penalties for non-compliance with the TCO provisions. However, any breach of the Customs Act, including failure to comply with TCO regulations, could potentially lead to civil or administrative penalties. These could include fines, confiscation of goods, or other sanctions as determined by the relevant authorities. The exact penalties would depend on the specific breach and would be subject to the broader provisions of the Customs Act and any related legislation. The focus of the Act is on ensuring that the process for issuing TCOs is transparent and fair, rather than on imposing heavy penalties for non-compliance.