EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804094
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 Australia Limited applied for a TCO in respect of certain spiral freezer tunnel conveyor belts on 17 March 2008.
Instrument
TCO No 0804094 was made on 06 June 2008. It declares that those certain spiral freezer tunnel conveyor belts 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. 0804094 is taken to have come into force on 17 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 Customs Act 1901 was enacted by the Parliament of Australia to regulate the importation of goods into the country, including the imposition of customs duties. The Tariff Concession Instrument No. 0804094 was introduced to provide tariff concessions for certain goods, in this instance, spiral freezer tunnel conveyor belts. This instrument was created to respond to an application by Unilever Australia Limited, aiming to address a gap where certain goods did not have a substitutable equivalent produced within Australia, thus qualifying for tariff concessions under the Act. The policy objective of this legislation is to facilitate the import of goods by reducing the customs duty burden on specific items, thereby potentially lowering costs for businesses and consumers while ensuring that no existing rights are adversely affected. The Tariff Concession Order (TCO) No. 0804094 was made by the Chief Executive Officer of Customs, who determined that the application met the core criteria set out in the Act. The TCO came into force on the date the application was lodged, 17 March 2008, and no submissions were received in opposition to the concession.
Scope and Application
The Customs Act 1901 applies to all individuals and entities engaged in the importation of goods into Australia, as well as to the goods themselves, by providing a framework for the imposition of customs duty. Specifically, the Tariff Concession Instrument No. 0804094 applies to the particular case of certain spiral freezer tunnel conveyor belts, which are subject to a concession that allows for the reduction of duty from the general rate of 5% to free, provided certain conditions are met. This instrument extends to the entire Commonwealth of Australia, encompassing both state and territory jurisdictions. The Act allows for exclusions through subordinate instruments, such as the specified goods in section 269SJ that cannot be subject to a TCO, and the application of these concessions is contingent on satisfying the core criteria outlined in sections 269C and 269D of the Act. The instrument, which came into force on 17 March 2008, does not adversely affect the rights of any person other than the Commonwealth, ensuring that any benefits or changes apply prospectively from the date of its registration.
Key Provisions
The Tariff Concession Instrument No. 0804094 (the Instrument) under the Customs Act 1901, specifies certain spiral freezer tunnel conveyor belts as goods to which a tariff concession order (TCO) applies, effectively setting the duty rate on these goods to free (section 269P(3)). Section 269C of the Act outlines the core criteria that must be satisfied for a TCO to be granted. Specifically, the application must demonstrate that on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms 'substitutable goods', 'ordinary course of business', and 'goods produced in Australia' are defined in sections 269D, 269E, and 269F of the Act, respectively.
The obligations imposed by the Act on the Chief Executive Officer of Customs (CEO) include accepting the TCO application if it meets the core criteria and publishing a notice in the Gazette to invite submissions from any interested parties (subsection 269K(1)). The CEO is required to consider any submissions received and make a written order if the application is valid. In this case, the CEO received no submissions and proceeded to make the TCO, which declares the specified goods as subject to the concession. The TCO is considered effective from the date the application was lodged, 17 March 2008 (subsection 269S(1)), and it does not affect any pre-existing rights or liabilities of any person except the Commonwealth. Importers of the affected goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations.
Breaches of the provisions of the Customs Act 1901 can result in both civil and criminal penalties. For instance, if an entity fails to comply with the terms of the TCO or attempts to fraudulently claim a tariff concession, they may face prosecution under section 277, which includes potential fines of up to $22,200 for individuals and significantly higher penalties for corporations. Additionally, under section 269W, the CEO has the authority to cancel a TCO if it is found that the application was fraudulent or misleading, which can result in further administrative consequences for the entity involved.