EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839573
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.
Coca Cola Amatil (Australia) Pty Ltd applied for a TCO in respect of certain anolyte catholyte production apparatus on 12 November 2008.
Instrument
TCO No 0839573 was made on 06 February 2009. It declares that those certain anolyte catholyte production apparatus 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. 0839573 is taken to have come into force on 12 November 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, as amended by Tariff Concession Instrument No. 0839573, was enacted to provide a mechanism for reducing the customs duty on specific imported goods. This legislation was introduced to address a gap in the tariff scheme by allowing for tariff concessions on goods that are not produced in Australia and for which there are no substitutable domestic products. The instrument was made by the Chief Executive Officer of Customs in response to an application by Coca Cola Amatil (Australia) Pty Ltd for a Tariff Concession Order (TCO) concerning certain anolyte catholyte production apparatus. The primary objective of the legislation is to facilitate the importation of these goods by applying a reduced rate of customs duty, thus supporting the competitive position of Australian businesses.
The Tariff Concession Instrument No. 0839573 was published in the Gazette to invite any submissions against the concession but received none. It came into effect on 12 November 2008, the date the application was lodged. This instrument ensures that the rights of importers are positively impacted, as they can apply for duty refunds for imports since the effective date of the TCO. The legislation does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to provide reduced rates of customs duty on certain goods. This legislative mechanism is intended to benefit entities that import specific goods by reducing the financial burden associated with customs duties. To be eligible for a TCO, the goods in question must not be produced in Australia in the ordinary course of business and must not be specified in section 269SJ of the Act, which lists goods ineligible for TCOs. An applicant, such as Coca Cola Amatil (Australia) Pty Ltd, must demonstrate that no substitutable goods are produced in Australia, as defined in section 269D of the Act. If the CEO is satisfied that the application meets these criteria, a TCO is issued, granting tariff concessions on the specified goods. The TCO applies nationally, impacting the rights of importers beneficially by allowing them to apply for refunds on duties paid prior to the TCO's effective date. The CEO is also required to publish notices in the Gazette inviting submissions from any interested parties, although no submissions were received in the case of TCO No. 0839573. This order came into force on the date the application was lodged, 12 November 2008.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they relate to Tariff Concession Orders (TCOs), establish a framework for reducing customs duty on specific goods. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the CEO is satisfied that the application meets the core criteria, as outlined in sections 269C, 269B, and 269D, and that no substitutable goods are produced in Australia, they must make a written order, a TCO, applying a lower rate of customs duty to the specified goods (section 269P(3)). In this particular case, TCO No 0839573 was issued for certain anolyte catholyte production apparatus, setting the duty rate at free instead of the general 5% (section 50 of Schedule 4 to the Tariff).
The Act imposes several obligations on parties applying for a TCO. Applicants must ensure that their applications are not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. They must also provide sufficient evidence to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as per sections 269C, 269B, and 269D. Once a TCO application is accepted as valid, the CEO is required to publish a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). The CEO must consider these submissions before making a final decision.
The Act does not explicitly outline specific offences or penalties for breaches related to TCOs. However, general compliance with the Customs Act 1901 and associated regulations is mandatory. Failure to comply with the Act or regulations could potentially lead to civil or criminal consequences, including fines and imprisonment, as prescribed under other sections of the Act. The precise penalties would depend on the nature and severity of the breach, with maximum penalties varying based on the specific offence under Australian law.