EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806085
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.
Moffat Pty Limited applied for a TCO in respect of certain meal delivery trolleys on 30 April 2008.
Instrument
TCO No 0806085 was made on 18 July 2008. It declares that those certain meal delivery trolleys 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. 0806085 is taken to have come into force on 30 April 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. 0806085 was enacted in 2008 under the Customs Act 1901 to provide a lower rate of customs duty on certain goods, specifically certain meal delivery trolleys, in response to an application by Moffat Pty Limited. The instrument was introduced to address the gap in duty rates for these specific goods by allowing the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) provided certain criteria were met, such as the absence of substitutable goods produced in Australia. The policy objective of this legislative instrument is to facilitate the importation of goods that are not produced domestically, thereby potentially lowering costs for importers and consumers.
The instrument was enacted by the relevant legislature, as specified in the Customs Act 1901, and took effect from the date the application was lodged, 30 April 2008. The process involved publishing a notice in the Gazette to invite submissions, though none were received. The TCO does not affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or incurs new liabilities as a result of its implementation. Importers are entitled to apply for a refund of duty on goods imported since the effective date of the TCO, thereby benefiting from the reduced duty rate.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce customs duty on certain goods. These orders apply to specific goods as outlined in the application, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application process involves assessing whether the goods meet the core criteria, such as the absence of domestically produced alternatives. Once a TCO is issued, it provides relief from the general customs duty rate, as seen in the case of Moffat Pty Limited's application for meal delivery trolleys, where the duty rate was reduced from 5% to free. The TCO’s commencement date is the day the application is lodged, and it does not affect pre-existing rights or impose new liabilities on persons other than the Commonwealth. The CEO is mandated to invite submissions from interested parties before finalising a TCO, although no objections were received for TCO No. 0806085.
Key Provisions
Section 269C of the Customs Act 1901, which outlines the core criteria for a Tariff Concession Order (TCO), is central to the operation of the scheme. An application for a TCO is valid if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This means that if the goods in question are not being produced domestically, they can be eligible for a concession under the Customs Tariff Act 1995. The CEO must satisfy themselves that the application meets these criteria before making the order. Section 269P(3) mandates that if the CEO is satisfied, they must issue a written TCO, specifying the applicable customs duty rate from the Tariff.
The obligations imposed by the Customs Act 1901 on parties involved in the TCO process are significant. An applicant, such as Moffat Pty Limited, must ensure their application is made in accordance with the Act, particularly adhering to the core criteria outlined in section 269C. The CEO has the duty to review the application and determine whether it meets these criteria. If satisfied, the CEO must issue a TCO, as mandated by section 269P(3). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties, as per subsection 269K(1). This notice must be published as soon as practicable after accepting the application as valid.
Breaches of the requirements under the Customs Act 1901 can result in various consequences. Although the explanatory statement does not specify offences under this particular TCO, general breaches of the Customs Act could lead to civil or criminal penalties. For instance, providing false information in an application or attempting to circumvent the provisions of the Act could result in penalties. Under the Customs Act, civil penalties can include fines up to 10,000 penalty units or imprisonment for up to five years, or both, for serious offences. Criminal penalties may be imposed for more severe breaches, with maximum penalties depending on the specific nature of the offence. The Act also allows for the recovery of any duty or tax owed, along with interest and additional penalties.