EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840370
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.
Australian & New Zealand Winemakers Pty Ltd applied for a TCO in respect of certain wine filters on 19 November 2008.
Instrument
TCO No 0840370 was made on 06 February 2008. It declares that those certain wine filters 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. 0840370 is taken to have come into force on 19 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, enacted by the Parliament of Australia, includes provisions under Part XVA for the creation of Tariff Concession Orders (TCOs), which are designed to provide lower rates of customs duty on specified goods. This legislative framework was introduced to address the need for a streamlined process by which businesses could apply for tariff reductions on imported goods that are not produced domestically. The Tariff Concession Instrument No. 0840370, made under this Act, exemplifies the process by which the Chief Executive Officer of Customs can grant such concessions, ensuring that applications are assessed against core criteria to maintain the integrity of the scheme. This particular TCO, issued in response to an application from Australian & New Zealand Winemakers Pty Ltd for certain wine filters, exemplifies the application of the policy objective to reduce customs duty for goods that are not produced in Australia, thereby supporting the competitiveness of Australian businesses in the global market.
Scope and Application
The Tariff Concession Instrument No. 0840370 under the Customs Act 1901 applies to certain wine filters as specified in the instrument, granting them tariff concessions that were sought by Australian & New Zealand Winemakers Pty Ltd. This instrument is designed to lower the rate of customs duty on these specific goods to zero, provided they meet the criteria set out in the Act. The instrument operates by declaring that the specified wine filters are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, which otherwise imposes a general duty rate of 5%. The instrument’s application is effective from the date the application was lodged, which is 19 November 2008, and it applies nationally across Australia. The application process involves an assessment by the Chief Executive Officer of Customs to ensure that no substitutable goods are produced in Australia, thereby validating the concession. The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities. The rights of importers will be positively affected as they can apply for a refund of duties paid on these goods since the date the instrument came into force.
Key Provisions
The primary sections of this legislation concern Tariff Concession Orders (TCOs) under the Customs Act 1901 (sections 269C, 269F, 269K, and 269S). Section 269F allows an individual or entity to apply for a TCO from the Chief Executive Officer of Customs (CEO). The CEO assesses the application against the core criteria set out in section 269C, which requires the CEO to confirm that no substitutable goods were produced in Australia on the date the application was lodged. If the CEO is satisfied that the application meets these criteria, a written order is made declaring that the specified goods are subject to the prescribed tariff item (section 269P(3)). TCO No. 0840370, issued on 6 February 2008, exemplifies this process, applying a zero rate of duty to certain wine filters due to the absence of substitutable goods produced in Australia at the time of application.
The obligations imposed on the parties by this Act include the necessity for applicants to submit detailed applications and for the CEO to thoroughly evaluate these applications against the specified criteria. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not proceed (section 269K(1)). The CEO's obligation to consider any submissions received and to make a decision based on the evidence presented is paramount. Additionally, the Act mandates that the rights of importers are protected and can benefit from duty refunds for goods imported since the TCO came into force (Regulations, paragraph 126(1)(r)).
In terms of penalties and consequences, the Act does not explicitly outline specific penalties for breaches related to TCO applications. However, any failure to comply with the Act's requirements could potentially lead to civil or administrative consequences, including the revocation of tariff concessions if it is found that the conditions for the TCO were not met. The Act ensures that no person other than the Commonwealth will be disadvantaged or imposed with liabilities due to the TCO (section 269S). This means that while the Act provides clear operational guidelines, it also seeks to protect the rights and interests of all stakeholders involved.