EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836868
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.
Moffat Pty Limited applied for a TCO in respect of certain meal trays on 24 October 2008.
Instrument
TCO No 0836868 was made on 16 January 2009. It declares that those certain meal trays 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. 0836868 is taken to have come into force on 24 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 Parliament of Australia, provides a framework for the administration of customs duties and the regulation of imports and exports. The Act was introduced to address the need for a structured approach to customs and tariff regulation, ensuring that the importation of goods into Australia is managed efficiently and effectively. Under Part XVA of the Act, the Chief Executive Officer of Customs is authorised to make Tariff Concession Orders (TCOs) which can reduce the customs duty payable on specified goods. The policy objective is to support Australian industries by facilitating the importation of goods that are not produced domestically, thereby encouraging competition and potentially lowering prices for consumers.
Tariff Concession Instrument No. 0836868 was introduced in response to an application from Moffat Pty Limited for a TCO on certain meal trays. The instrument was made on 16 January 2009 and it declares that the specified meal trays are subject to a zero rate of duty, effective from the date of the application on 24 October 2008. This was in recognition that no substitutable goods were being produced in Australia at the time of the application, aligning with the core criteria set out in the Customs Act 1901. The instrument ensures that the rights of importers are not adversely affected, and they may apply for duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0836868, pursuant to Part XVA of the Customs Act 1901, applies to the concession of customs duty for specific goods, in this case certain meal trays, which are subject to a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs (CEO). This Act enables the CEO to grant tariff concessions on goods, provided that the application meets the core criteria outlined in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The instrument specifically benefits Moffat Pty Limited by setting the duty on the specified meal trays to zero, down from the general rate of 5%. The geographic scope of this Act is national, as it pertains to the Commonwealth's customs duty regime. The application of the TCO is not limited to any particular industry or entity but is open to any applicant who meets the eligibility criteria. The Act does not impose any liabilities or affect the rights of any person other than the Commonwealth, and it does not disadvantage or impose liabilities on any person in respect of actions taken before the TCO’s effective date. The instrument also allows for the possibility of refund applications for duties paid on the specified goods since the effective date of the TCO.
Key Provisions
The primary sections of this legislation (section 269C, 269B, 269D, 269E, and 269P) outline the conditions under which a Tariff Concession Order (TCO) may be made by the Chief Executive Officer of Customs (section 269F). A TCO is an order that allows for a lower rate of customs duty to apply to specified goods, provided that certain criteria are met. These criteria include that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The definitions of key terms such as 'goods produced in Australia' (section 269D), 'ordinary course of business' (section 269E), and'substitutable goods' (section 269B) are also provided, ensuring clarity on what is meant by these terms in the context of the TCO process.
The Act imposes specific obligations on parties applying for a TCO. An applicant must ensure that their application is not in respect of goods that are specified in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. Additionally, the Chief Executive Officer of Customs is obligated to make a written TCO if satisfied that the application meets the core criteria outlined in section 269C. The CEO must also publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid, inviting any person to lodge a submission if they consider the TCO should not be made (subsection 269K(1)).
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations could result in various consequences. Although the explanatory statement does not detail specific offences, penalties, or consequences for breach, it is implied that breaches of the Act's provisions could lead to legal actions. Typically, such breaches may involve civil penalties for incorrect declarations or failure to comply with duty requirements, and potentially criminal penalties for deliberate or negligent breaches. The maximum penalties for breaches of customs laws can include substantial fines and imprisonment, depending on the severity and intent of the breach.