EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0820753
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.
Australian Pet Essentials Pty Ltd applied for a TCO in respect of certain pet food process line on 18 July 2008.
Instrument
TCO No 0820753 was made on 10 October 2008. It declares that those certain pet food process line 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. 0820753 is taken to have come into force on 18 July 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 amended to include the Tariff Concession Instrument No. 0820753, which was enacted in 2008 to address the need for a streamlined process in granting tariff concessions on specific goods. This legislation enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to goods that are subject to such orders, provided the goods meet certain criteria. This initiative was introduced to facilitate trade by reducing the financial burden on businesses importing specified goods, thereby enhancing the competitiveness of Australian businesses in the global market. The enacting body responsible for this legislation is the Australian Parliament, with the primary policy objective being to foster economic growth by making it easier and more cost-effective for businesses to import necessary goods.
Scope and Application
The Tariff Concession Instrument No. 0820753, made under Part XVA of the Customs Act 1901, applies to the concession of customs duty rates for specific goods that meet the criteria set out in the Act. This instrument pertains to entities or individuals who seek tariff concessions for goods, ensuring that these applicants are not dealing with goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument has a national reach, affecting the entire Commonwealth of Australia by modifying customs duties on the specified goods, which in this instance are certain pet food processing lines. The application of this instrument is restricted by the conditions outlined in sections 269C, 269D, and 269E of the Act, which define the criteria for substitutable goods and ordinary course of business production in Australia. The concession is effective from the date the application was lodged, as stipulated by subsection 269S(1) of the Act, thereby allowing for immediate benefits to importers who can apply for duty refunds on goods imported since the effective date. The instrument does not extend to imposing any liabilities on persons other than the Commonwealth and does not affect the rights of any person as at the date of registration.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0820753, provides for the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs (section 269F). This instrument, effective from 18 July 2008, specifically addresses the application made by Australian Pet Essentials Pty Ltd for a TCO concerning certain pet food processing lines. Pursuant to section 269P(3), the CEO was required to assess whether the application met the core criteria, which includes determining whether substitutable goods were being produced in Australia at the time of the application (section 269C). In this case, the CEO confirmed that no such substitutable goods were being produced, thus allowing the concession to proceed.
In line with the obligations set out in the Customs Act, the CEO was required to publish a notice in the Gazette inviting any interested parties to provide submissions against the proposed TCO (subsection 269K(1)). This notice was published as soon as practicable after accepting the application. However, in this instance, no submissions were received, leading the CEO to proceed with granting the TCO. The TCO itself declares that the specified pet food processing lines are subject to the prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 5%.
Under the Customs Act, the TCO does not affect any pre-existing rights of persons other than the Commonwealth, ensuring that no party is disadvantaged or incurs liabilities for actions taken prior to the TCO's effective date (subsection 269S(1)). Importers of the affected goods will have the opportunity to apply for a refund of duties paid on those goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations). This mechanism provides a clear pathway for affected parties to seek relief under the Act.
Failure to comply with the provisions of the Customs Act or the terms of a TCO may result in both civil and criminal consequences. For instance, under section 228A of the Customs Act, a person who contravenes the Act may be liable for a civil penalty. The maximum penalty for such an offence can include fines up to $22,200 for individuals and significantly higher amounts for corporations, depending on the severity and nature of the breach. Additionally, the Act provides for criminal penalties, including imprisonment, for more serious or repeated offences, underscoring the importance of adhering to the statutory requirements.