EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835251
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.
Tetra Pak Marketing applied for a TCO in respect of certain chain conveyor on 14 October 2008.
Instrument
TCO No 0835251 was made on 14 January 2009. It declares that those certain chain conveyor 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. 0835251 is taken to have come into force on 14 October 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, enacted by the Australian Parliament, provides a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. This mechanism aims to address the gap in tariff concessions for goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods exist domestically. The Tariff Concession Instrument No. 0835251, published on 14 January 2009, is an example of such an order made under this scheme. In this specific case, Tetra Pak Marketing applied for a TCO on certain chain conveyors on 14 October 2008. The CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of the TCO, which resulted in the elimination of duty on these goods. The policy objective behind this TCO is to facilitate the importation of these specific goods without imposing additional duties, thereby benefiting importers and potentially stimulating trade.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0835251, provides a framework for the Chief Executive Officer of Customs (the CEO) to grant Tariff Concession Orders (TCOs) that reduce the customs duty on specified goods. These concessions apply to goods that are subject to the TCO, and the process begins with an application to the CEO by a person who satisfies the core criteria outlined in section 269C of the Act. Specifically, the application must relate to goods for which no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. Once the CEO is satisfied that the application meets these criteria and that the goods are not specified in section 269SJ, which excludes certain goods from concession eligibility, a TCO is made declaring the goods to which a lower rate of duty applies. The scope of the TCO is limited to the goods specified in the order and does not affect the rights or impose liabilities on any person with respect to actions taken before the TCO's effective date. This legislative instrument operates on a national level under the Commonwealth's jurisdiction, extending its reach to any entity or individual involved in the importation of the specified goods.
Key Provisions
The Tariff Concession Order No. 0835251 (TCO) made under the Customs Act 1901, specifies that certain chain conveyors are subject to a concessional rate of duty, which is free, rather than the general rate of 5% (section 269F). The CEO must be satisfied that no substitutable goods are produced in Australia to grant this concession (section 269C). The TCO came into effect on 14 October 2008, the date the application was lodged (section 269S(1)). The TCO does not affect any existing rights or impose any new liabilities (section 126(1)(r) of the Regulations).
The obligations imposed by this Act on the parties it governs primarily concern the application and review processes for TCOs. For example, an applicant must ensure that the application meets the core criteria specified in section 269C of the Act, which includes the absence of substitutable goods produced in Australia. The CEO is required to consider the application, consult as necessary, and publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). If no submissions are received, the CEO must proceed with making the TCO. The Act also places an obligation on the CEO to ensure that the TCO does not adversely affect any existing rights or impose new liabilities on anyone other than the Commonwealth.
Failure to comply with the requirements of the Customs Act 1901 or the associated regulations may result in legal consequences. While the explanatory statement does not detail specific offences under the Act, breaches of customs laws can typically lead to penalties. Under section 288 of the Customs Act 1901, penalties for breaches can include fines of up to $22,000 for individuals and significantly higher amounts for corporations, as well as potential criminal charges and imprisonment. The precise penalties depend on the nature and severity of the breach.
The explanatory statement also highlights that the TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force. This is an important aspect of the legislative framework, as it not only provides relief to importers but also encourages compliance by ensuring that they can recover any overpaid duties. This mechanism is an integral part of the administrative process outlined in the Act, ensuring that the concession is effectively administered and that the rights of all parties are protected.