EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812103
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.
Vemag Australia applied for a TCO in respect of certain sausage delinker on 11 June 2008.
Instrument
TCO No 0812103 was made on 15 August 2008. It declares that those certain sausage delinker 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. 0812103 is taken to have come into force on 11 June 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 Australian Parliament and addresses the need for a streamlined process to reduce customs duty on certain imported goods through the introduction of Tariff Concession Orders (TCOs). The Act empowers the Chief Executive Officer of Customs to make these orders, which apply a lower rate of customs duty on specified goods if no substitutable goods are produced in Australia. Vemag Australia's application for a TCO concerning certain sausage delinkers led to the creation of TCO No. 0812103, which was issued on 15 August 2008. This order applies to the specific sausage delinkers listed under item 50 of Schedule 4 to the Customs Tariff Act 1995, granting them a duty-free status, while the general rate of duty for such goods remains at 5%. The process ensures that the rights of importers are protected and may benefit from a refund of duty on goods imported since the TCO came into effect on 11 June 2008.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import goods into Australia that are not produced in the country and for which there are no substitutable goods. The Act's application is national, with the Chief Executive Officer of Customs having the authority to determine eligibility for tariff concessions based on specific criteria outlined in the Act. The process involves an application being made under section 269F, which must be evaluated against the core criteria set out in section 269C, ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act extends to providing relief to importers by potentially lowering the duty on certain imported goods, as evidenced by TCO No. 0812103, which was issued for sausage delinkers, reducing the duty rate from 5% to free. The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage anyone who was importing the goods before the TCO was issued. The commencement of the TCO is effective from the date the application was lodged, as per subsection 269S(1) of the Act.
Key Provisions
The Tariff Concession Instrument No. 0812103, under the Customs Act 1901, introduces a tariff concession order (TCO) for specific sausage delinkers. Section 269F of the Act allows an individual or entity to apply for a TCO if the goods in question are not specified in section 269SJ, which lists goods ineligible for such concessions. The Chief Executive Officer of Customs (CEO) evaluates the application against the core criteria outlined in section 269C, specifically verifying whether substitutable goods were produced in Australia on the application's lodgement date, as per section 269P(3). If these criteria are met, the CEO issues a written TCO order, as seen in the case of the sausage delinkers, which now fall under item 50 of Schedule 4 to the Customs Tariff Act 1995, granting them a duty-free status.
Under the Customs Act 1901, the CEO's role is pivotal in the TCO process. The CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not proceed, as stipulated in subsection 269K(1). In this instance, the CEO did not receive any submissions against the TCO application for sausage delinkers. The TCO is deemed to come into effect on the date the application was lodged, which in this case was 11 June 2008, as per subsection 269S(1). Importantly, the TCO does not affect the rights of any person, except the Commonwealth, concerning actions taken before the registration date. Importers of the affected goods benefit from this TCO as they can apply for a refund of duty paid on imports made since the effective date of the TCO.
Failure to comply with the obligations and requirements set out in the Customs Act 1901 may lead to civil and criminal consequences. Breaches of the Act can result in significant penalties. For example, individuals or entities found guilty of knowingly importing goods that do not meet the specified criteria for a TCO may face fines or imprisonment. The maximum penalties can vary depending on the severity of the offence, with higher fines and longer prison sentences for more egregious violations. The Act also includes provisions for the recovery of any financial loss caused by non-compliance, ensuring that those who benefit unfairly from tariff concessions are held accountable.