EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826091
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.
Chrysco Flowers Pty Ltd applied for a TCO in respect of certain flower production line on 12 August 2008.
Instrument
TCO No 0826091 was made on 31 October 2008. It declares that those certain flower production 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. 0826091 is taken to have come into force on 12 August 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. 0826091 was enacted in 2008 under the Customs Act 1901 to address the need for tariff concessions on specific imported goods. This instrument was introduced to provide relief on customs duties for certain goods, thereby encouraging trade and supporting industry competitiveness. The instrument was initiated by Chrysco Flowers Pty Ltd, which applied for tariff concessions on a certain flower production line. The Chief Executive Officer of Customs was tasked with assessing the application against the core criteria outlined in the Customs Act, which includes ensuring that no substitutable goods were produced in Australia at the time of application. The instrument declares that the flower production line in question is subject to a 5% duty rate, down from the general rate, thereby benefiting importers who can apply for duty refunds on goods imported since the instrument's effective date of 12 August 2008. The policy objective is to facilitate smoother trade operations and economic benefits by reducing the customs duty burden on specific imported goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for certain goods, granting them a reduced rate of customs duty. This legislative framework allows individuals or entities to apply for a TCO provided the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. An application will meet the core criteria under section 269C if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This concessional treatment is contingent on the CEO's satisfaction that a TCO application meets the criteria outlined in the Act, specifically the absence of substitutable goods produced domestically. Once a TCO is issued, the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the general customs duty rate for those goods. The process of issuing a TCO includes mandatory publication in the Gazette to allow interested parties to submit objections, although in this instance, no submissions were received. The TCO applies retroactively to the date the application was lodged, ensuring that the rights of importers are beneficially affected from that date, including the eligibility for duty refunds under the relevant regulations.
Key Provisions
The Tariff Concession Instrument No. 0826091, under section 269F of the Customs Act 1901, allows for a lower rate of customs duty on certain goods through a Tariff Concession Order (TCO). This applies to goods such as a specific flower production line, which Chrysco Flowers Pty Ltd applied for, as declared by the Chief Executive Officer of Customs (CEO) in Instrument TCO No 0826091 on 31 October 2008. The instrument specifies that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with the general duty rate of 5% reduced to free.
The Act imposes specific criteria for the CEO to consider when making a TCO. Section 269C requires the CEO to be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." In this instance, the CEO determined that no substitutable goods were being produced in Australia, allowing the TCO to be issued.
The CEO is also mandated by section 269K(1) to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit objections. In this case, the CEO did not receive any submissions. Furthermore, subsection 269S(1) stipulates that a TCO comes into force on the day the application is lodged. Consequently, TCO No. 0826091 is effective as of 12 August 2008.
The TCO does not affect any existing rights or impose new liabilities on any person except the Commonwealth. However, it provides a benefit to importers of these goods by allowing them to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. For breaches of any conditions set out in a TCO, the CEO may face civil or criminal penalties as prescribed by the relevant sections of the Customs Act 1901 and the Customs Tariff Act 1995. These penalties may include fines or imprisonment, depending on the severity of the breach.