EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829837
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.
George Weston Foods Pty Ltd applied for a TCO in respect of certain bread loaf bags on 05 September 2008.
Instrument
TCO No 0829837 was made on 28 November 2008. It declares that those certain bread loaf bags 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. 0829837 is taken to have come into force on 05 September 2009.
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, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties. Specifically, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This scheme aims to address the problem of applying lower rates of customs duty to certain goods, provided they meet specific criteria. One such TCO, Tariff Concession Instrument No. 0829837, was made on 28 November 2008 in response to an application by George Weston Foods Pty Ltd for certain bread loaf bags. The instrument declares that these specific bread loaf bags are subject to a free rate of duty, as the CEO was satisfied that no substitutable goods were produced in Australia. The policy objective here is to encourage the importation of goods that are not domestically produced, thereby potentially benefiting importers and consumers by reducing costs.
Scope and Application
The Customs Act 1901, through Part XVA, provides for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty to apply to specific goods, subject to certain criteria. A TCO can be applied for by any person in relation to goods that are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. For an application to proceed, the CEO must be satisfied that the goods are not substitutable by any goods produced in Australia in the ordinary course of business, as defined under sections 269D and 269E of the Act. Upon meeting these criteria, a TCO is issued, effectively applying a prescribed tariff rate to the specified goods, as listed in Schedule 4 to the Customs Tariff Act 1995. The TCO does not retroactively affect the rights of any person, including importers who may benefit from a refund of duty paid on goods imported since the TCO’s effective date. Importantly, the Act ensures that no new liabilities are imposed on any person as a result of the issuance of a TCO.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269P(3) and 269S of the Customs Act 1901 (the Act), along with the related Tariff Concession Order (TCO) No. 0829837. Section 269C requires the Chief Executive Officer of Customs (the CEO) to consider whether an application for a TCO meets the core criteria, specifically whether no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Section 269B defines the key terms used in the assessment, such as 'goods produced in Australia', 'ordinary course of business' and 'substitutable goods'. Section 269P(3) mandates that if the application meets the core criteria, the CEO must issue a TCO that declares the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The TCO No. 0829837 in this case declares that certain bread loaf bags are subject to a duty rate of free, as opposed to the general rate of 5%. Section 269S provides that a TCO is taken to have come into force on the day on which the application for the TCO was lodged.
The obligations and requirements imposed by the Act on the parties it governs include the CEO's duty to assess whether an application for a TCO meets the core criteria, as outlined in section 269C. This involves determining if no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, as per subsection 269K(1) of the Act. Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth, as stipulated in section 269S of the Act.
The legislation imposes penalties and consequences for non-compliance with the requirements set out in the Customs Act 1901 and the related TCO. While the explanatory statement does not detail specific penalties, breaches of the Act or TCO may lead to legal actions under the relevant sections. The Act may also provide for administrative actions such as fines or other sanctions for non-compliance. Additionally, the CEO may revoke a TCO if it is found that the conditions for its issuance were not met, as per section 271 of the Act. This underscores the importance of adherence to the statutory requirements and the potential repercussions for any violations.