EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833171
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.
Nestle Australia applied for a TCO in respect of certain rotary cooker on 26 September 2008.
Instrument
TCO No 0833171 was made on 12 December 2008. It declares that those certain rotary cooker 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. 0833171 is taken to have come into force on 26 September 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. 0833171, enacted in 2008, is an instrument under the Customs Act 1901, designed to address the issue of tariff concessions for specific goods imported into Australia. The instrument was introduced to facilitate the application of lower customs duty rates on certain goods, provided they meet the criteria set out in the Act. The Tariff Concession Order (TCO) in question pertains to certain rotary cookers, for which the general rate of duty is 5%, but which are subject to a zero duty rate under this specific TCO. The instrument was made following an application by Nestle Australia on 26 September 2008, and was effective from that date. The Chief Executive Officer of Customs was satisfied that the application met the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. This decision was made without any objections as no submissions were received in response to the published notice in the Gazette. The policy objective of this TCO is to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, without imposing any liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0833171 applies to goods specified in the instrument, which in this case are certain rotary cookers, and is subject to the Customs Act 1901. The act applies to entities such as Nestle Australia that seek tariff concessions for specific goods imported into Australia. The application process involves meeting core criteria as outlined in the Act, particularly ensuring that no substitutable goods are produced in Australia. The geographic reach of the Act is national, as it pertains to goods entering Australia. The application of the Act may be extended or restricted through subordinate instruments. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, as clarified by the explanatory statement. The Customs Act 1901, along with its subordinate instruments, provides the framework within which the Tariff Concession Orders are made, ensuring that the application and impact of such orders are clearly defined and communicated to all relevant stakeholders.
Key Provisions
The primary operative sections of this legislation relate to the creation and effect of Tariff Concession Orders (TCOs). Section 269F of the Customs Act 1901 allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods, provided the goods are not specified in section 269SJ as ineligible. If the application meets the core criteria outlined in section 269C, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must make a TCO. This order, detailed in TCO No. 0833171, specifies that certain rotary cookers will be subject to a free rate of duty instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO is required to determine whether an application meets the core criteria (section 269C) and must publish a notice in the Gazette inviting submissions if the application is accepted as valid (subsection 269K(1)). In this instance, Nestle Australia applied for the TCO, and the CEO, after satisfying the criteria, issued the concession. Importers of the specified goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations from the date the TCO is taken to have come into force.
Breaching the provisions of the Customs Act 1901, including the misuse of a TCO, may result in legal consequences. While specific offences and penalties are not detailed in the explanatory statement, general penalties for breaches of the Customs Act can include fines and imprisonment. For instance, under section 241 of the Act, individuals or entities found guilty of an offence can be fined up to $22,000 for individuals and $110,000 for bodies corporate, in addition to other potential civil or criminal consequences. These penalties underscore the importance of adhering to the legislative requirements and utilising TCOs appropriately.