EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812468
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.
Hillmark Industries Pty Ltd applied for a TCO in respect of certain sushi maker on 12 June 2008.
Instrument
TCO No 0812468 was made on 15 August 2008. It declares that those certain sushi maker 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. 0812468 is taken to have come into force on 12 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 to provide a comprehensive framework for the regulation of customs and excise in Australia. One of its key features is the provision for Tariff Concession Orders (TCOs) under Part XVA, designed to address the problem of ensuring that Australian industries are not unfairly disadvantaged by the imposition of customs duty on imported goods that have no local equivalent. This allows for a lower rate of customs duty on specified imported goods, provided certain criteria are met. Enacted by the Australian Parliament, the Act aims to foster fair competition and economic efficiency by preventing the local production of goods that are more economically produced overseas. The Tariff Concession Instrument No. 0812468, made under this Act, specifically addresses the application by Hillmark Industries Pty Ltd for a TCO concerning certain sushi makers, reflecting the policy objective of supporting industries that cannot efficiently produce certain goods domestically.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the framework for Tariff Concession Orders (TCOs), which the Chief Executive Officer of Customs can issue to apply a lower rate of customs duty to specified goods. This legislation applies to any person or entity seeking to import goods eligible for a tariff concession, provided the goods do not fall under the categories listed in section 269SJ of the Act, which include goods that are prohibited or restricted. The Act's reach is national, governed by the Commonwealth, and it applies to all states and territories within Australia. A TCO application is subject to the core criteria outlined in sections 269C, 269B, and 269D, ensuring that no substitutable goods are produced in Australia at the time of application. TCO No. 0812468, for instance, was issued for certain sushi makers on 15 August 2008, following an application by Hillmark Industries Pty Ltd on 12 June 2008, after satisfying the core criteria and with no submissions opposing the concession. The order, which came into force on the date of application, reduced the duty on these goods from 5% to free, thereby benefiting importers who can claim refunds for duties paid on such goods since the effective date of the TCO.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0812468 under the Customs Act 1901 (section 269C) establish the criteria for tariff concessions on certain goods. Specifically, if the Chief Executive Officer of Customs (CEO) is satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application for a Tariff Concession Order (TCO) was lodged, the CEO must make a written order declaring that the goods in question are eligible for a reduced rate of customs duty. In this case, the instrument declares that certain sushi makers are eligible for a free rate of duty instead of the general rate of 5% (section 269P(3)).
The Act imposes several obligations on both applicants and the CEO. Applicants, such as Hillmark Industries Pty Ltd, must ensure their application for a TCO meets the core criteria, including demonstrating that no substitutable goods were produced in Australia (section 269C). The CEO is required to assess the application against these criteria and, if satisfied, to make a TCO within the specified timeframe (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties and consider any submissions received (subsection 269K(1)). In this case, no submissions were received, simplifying the process.
Breaches of the provisions in the Customs Act 1901 can lead to various civil and criminal consequences. For instance, if a person fails to comply with the requirements for a TCO application, they may face penalties under the Act. The specific penalties are not detailed in the explanatory statement, but generally, penalties for breaches of the Customs Act can include fines and imprisonment, depending on the severity of the breach. The maximum penalties would be determined according to the specific provisions of the Act and related regulations. Additionally, any misrepresentation or fraudulent activity in the application process could lead to more severe criminal penalties.