EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840472
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.
Arnotts Biscuits applied for a TCO in respect of certain dough metering pumps on 20 November 2008.
Instrument
TCO No 0840472 was made on 27 February 2009. It declares that those certain dough metering pumps 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. 0840472 is taken to have come into force on 20 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 Tariff Concession Instrument No. 0840472, enacted under the Customs Act 1901, was introduced to address the issue of tariff concessions for specific imported goods. This legislation allows for the application of a lower rate of customs duty to certain goods not produced in Australia, provided they meet the specified criteria. The Customs Act 1901, administered by the Commonwealth Parliament, facilitates this process through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. The primary objective of this instrument is to ensure that importers benefit from reduced duty rates, enhancing trade efficiency and economic benefits, as long as the imported goods are not substitutable by locally produced alternatives. Arnotts Biscuits' application for a TCO in respect of certain dough metering pumps exemplifies this process, leading to a tariff concession that exempts these goods from the general 5% duty rate, effective from the date of application.
Scope and Application
The Tariff Concession Instrument No. 0840472 pertains to the Customs Act 1901 and specifically applies to certain dough metering pumps which are subject to a Tariff Concession Order (TCO). This instrument was created to allow Arnotts Biscuits to apply for a tariff concession on these goods, thereby reducing the customs duty rate from 5% to free, provided that no substitutable goods were produced in Australia on the date the application was lodged. The geographic reach of this legislation is federal, operating under the auspices of the Commonwealth of Australia, and it applies to entities such as Arnotts Biscuits that are engaged in the importation of these specific goods. The instrument came into force on 20 November 2008, the date the application for the TCO was lodged. There were no submissions against the TCO after the Chief Executive Officer of Customs published a notice in the Gazette, inviting any interested parties to lodge a submission. The instrument does not disadvantage or impose liabilities on any person, and importers can apply for a refund of duty on goods imported since the TCO was taken to have come into force.
Key Provisions
The Tariff Concession Instrument No. 0840472 pertains to the Customs Act 1901 and is specifically concerned with Tariff Concession Orders (TCOs). Under section 269F of the Act, any person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. This application process is outlined in section 269C, which requires that for an application to meet the core criteria, no substitutable goods must be produced in Australia on the day the application is lodged. Substitutable goods, as defined in section 269D, are goods produced in Australia that can be used in a way similar to the goods the application pertains to. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a written TCO, specifying the lower duty rate for the goods in question.
The obligations imposed by the Act on the parties involved are primarily centred on the CEO's duties. Upon receiving a TCO application, the CEO must ensure it is valid and not for goods specified in section 269SJ, which excludes certain goods from TCO consideration. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made, as required by section 269K(1). If no submissions are received, the CEO proceeds to evaluate the application against the core criteria. Once the CEO is satisfied, they must issue a TCO. Additionally, section 269S(1) stipulates that the TCO comes into force on the day the application was lodged, in this case, 20 November 2008.
In terms of consequences for breach, the Act does not explicitly state offences or penalties for failing to comply with the requirements of a TCO. However, any misuse or circumvention of the TCO provisions could potentially lead to penalties under the broader Customs Act 1901, which includes provisions for civil and criminal penalties. For instance, fraudulent claims for tariff concessions could be prosecuted under section 253 of the Customs Act, which carries a maximum penalty of 10 years imprisonment. Furthermore, if importers or other parties misuse the concessions by, for example, submitting false information to claim undue benefits, they could face penalties under other relevant sections of the Act, such as section 252, which covers false statements and carries a maximum penalty of 5 years imprisonment.