EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804821
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.
Arnott's Biscuits Limited applied for a TCO in respect of certain biscuit wash over unit on 27 March 2008.
Instrument
TCO No 0804821 was made on 13 June 2008. It declares that those certain biscuit wash over units 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. 0804821 is taken to have come into force on 27 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 Instrument No. 0804821 was enacted in 2008 under the Customs Act 1901 to address the issue of providing tariff concessions for certain goods that are not produced in Australia and thus cannot be substituted by locally manufactured products. This instrument was created to facilitate the application process for Tariff Concession Orders (TCOs) as outlined in Part XVA of the Act. The objective of this legislative measure is to ensure that businesses importing specific goods can do so at a reduced rate of customs duty, thereby promoting fair trade practices and supporting industries that rely on imported components or materials.
The enactment of this instrument by the Chief Executive Officer of Customs was carried out in accordance with the provisions of the Customs Act 1901, which mandates that a TCO application meets the core criteria if no substitutable goods are produced in Australia. Arnott's Biscuits Limited's application for a TCO concerning certain biscuit wash over units was approved, resulting in the declaration that these units are subject to a free rate of duty, as opposed to the general rate of 5%. The instrument ensures that the rights of importers are positively impacted, and no liabilities are imposed on any person under this concession.
Scope and Application
The Tariff Concession Instrument No. 0804821 under the Customs Act 1901 applies specifically to the goods identified in the instrument, in this case, certain biscuit wash over units, which are to be treated as goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. The instrument was made by the Chief Executive Officer of Customs (the CEO) in response to an application from Arnott's Biscuits Limited, effective from 27 March 2008, the date on which the application was lodged. The instrument reduces the rate of customs duty on these goods from 5% to free, provided the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was made, as per the core criteria outlined in the Act. The instrument's geographic reach is national, applying across Australia, and it does not impose any liabilities on persons other than the Commonwealth. The instrument also ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the date of the instrument's commencement.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0804821 under the Customs Act 1901 (section 269P(3)) mandate that if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, the CEO must issue a written order (section 269P(3)). This order declares that the goods specified in the application are subject to a lower rate of customs duty as outlined in the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). Specifically, the TCO No. 0804821 declares that certain biscuit wash over units are subject to a free rate of duty instead of the general rate of 5% (section 269P(3)). This instrument applies to goods as from the date the application was lodged, 27 March 2008 (subsection 269S(1)).
The obligations imposed by this Act on the parties or entities it governs primarily involve the application process and the decision-making criteria for issuing TCOs. An applicant must submit a valid application to the CEO, which should be free from any specifications that fall under the list of goods that cannot be subject to a TCO as outlined in section 269SJ of the Act (subsection 269K(1)). The CEO must then determine whether the application meets the core criteria, which requires that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269B, 269C, 269D, and 269E of the Act (subsection 269K(1)). Upon satisfaction, the CEO must issue a TCO in writing, specifying the lower rate of duty applicable to the goods (section 269P(3)). Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO (subsection 269K(1)).
The legislation also outlines specific consequences for non-compliance. While the explanatory statement does not explicitly detail offences or penalties, it is inferred that the Act may include provisions for enforcement actions against those who fail to comply with the requirements of a TCO or who make false statements in their applications. Typically, such breaches could result in fines, penalties, or other civil or criminal consequences as stipulated in relevant sections of the Customs Act 1901 or other applicable laws. However, the exact penalties are not specified in the explanatory statement provided.