EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814157
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 ice confectionery filling and sealing machines on 23 June 2008.
Instrument
TCO No 0814157 was made on 01 September 2008. It declares that those certain ice confectionery filling and sealing machines 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. 0814157 is taken to have come into force on 23 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 Tariff Concession Instrument No. 0814157, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on certain imported goods that do not have Australian-made substitutes. The Customs Act 1901 established a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower customs duty rates to specified goods. The policy objective of this instrument was to facilitate the importation of ice confectionery filling and sealing machines, which are essential for specific industrial uses, without incurring the general rate of customs duty. The Parliament, through the enactment of this Act, aimed to support businesses by reducing costs associated with importing critical machinery, thus enhancing competitiveness and efficiency in relevant sectors. The instrument was designed to ensure that businesses could access necessary equipment at reduced tariff rates, provided no suitable Australian-made alternatives exist.
Scope and Application
The Tariff Concession Instrument No. 0814157, made under the Customs Act 1901, applies to certain ice confectionery filling and sealing machines which are now subject to a reduced rate of customs duty following the issuance of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs. The Act allows for the application of lower customs duty rates on goods specified in a TCO, provided that the goods are not listed in section 269SJ of the Act and meet the core criteria outlined in section 269C. This concession is contingent upon the absence of substitutable goods produced in Australia as defined by sections 269D and 269E of the Act. The geographic reach of this legislation is national, as it operates within the framework of the Commonwealth's customs regulations. The TCO does not retroactively disadvantage any person, except the Commonwealth, nor does it impose any liabilities on individuals or entities for actions taken prior to the order's registration. The rights of importers are positively affected, as they can apply for refunds of duty on goods imported since the TCO's effective date. The TCO was issued on 1 September 2008 and is considered to have come into force on the day the application was lodged, 23 June 2008, as per subsection 269S(1) of the Act.
Key Provisions
The Tariff Concession Order No. 0814157, under section 269P(3) of the Customs Act 1901, applies a lower rate of customs duty to certain ice confectionery filling and sealing machines. The CEO of Customs must make such an order if satisfied that no substitutable goods are produced in Australia, as outlined in section 269C. In this case, since no substitutable goods were produced, the order was issued, and the rate of duty for the specified machines is now free, down from the general rate of 5% (Section 269P(3)).
The Customs Act 1901 imposes several obligations on the parties involved. Firstly, any person may apply for a Tariff Concession Order in respect of goods under section 269F, provided the goods are not specified in section 269SJ as ineligible. The CEO must then assess whether the application meets the core criteria, primarily that no substitutable goods are produced in Australia as per section 269C. Once a TCO is issued, the CEO must also publish a notice in the Gazette under subsection 269K(1), inviting submissions from interested parties. If no submissions are received, as in this case, the TCO can proceed without further objection.
Breaching the provisions of the Customs Act 1901 can lead to significant penalties. For instance, making false statements or providing misleading information in an application for a TCO can be considered an offence. Such actions could result in civil or criminal consequences, including fines and imprisonment, depending on the severity and intent of the breach. The maximum penalties for these offences are not explicitly stated in the explanatory statement but are generally governed by the Act's broader provisions, which can include substantial fines and imprisonment terms.
Under the Customs Act 1901, the rights of individuals or entities other than the Commonwealth are protected from being disadvantaged by the TCO. Specifically, the order does not affect any pre-existing rights or impose liabilities for actions taken before the TCO's effective date. Importers, however, stand to benefit as they can apply for a refund of duty on goods imported since the TCO's effective date, which is 23 June 2008, as per subsection 269S(1). This provision ensures that the TCO does not unfairly burden any party while allowing importers to reclaim duties paid on eligible goods.