EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904719
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 applied for a TCO in respect of certain ice cream mix pasteurizers on 12 February 2009.
Instrument
TCO No 0904719 was made on 08 May 2009. It declares that those certain ice cream mix pasteurizers 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. 0904719 is taken to have come into force on 12 February 2009.
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. 0904719, made under the Customs Act 1901, was enacted to address the need for tariff concessions on specific goods that are not produced in Australia and for which no suitable substitutes are available. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) that reduce the customs duty on certain goods. This particular instrument was introduced in response to an application by Moffat for a TCO on certain ice cream mix pasteurizers, which led to the granting of a concession that effectively made the duty on these goods free. The instrument was enacted to ensure that the tariff reductions would apply from the date the application was lodged, providing immediate benefit to importers of the affected goods. The policy objective of this instrument is to support Australian importers by reducing the cost of goods that are not produced locally and for which no Australian alternatives exist.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking tariff concessions for goods that are not already being produced in Australia and where no suitable substitutes are available domestically. Such applications must meet the core criteria set out in the Act, including the absence of substitutable goods being produced in Australia in the ordinary course of business. Upon meeting these criteria, the CEO is mandated to issue a TCO, which effectively reduces or eliminates customs duty on the specified goods. In this instance, the TCO No. 0904719 pertains to certain ice cream mix pasteurizers, reducing their duty from 5% to free. The geographic scope of this Act is national, applying throughout Australia, and it does not disadvantage any person other than the Commonwealth or impose liabilities on any person for actions taken before the TCO's effective date. Additionally, the Act allows for the application of subordinate instruments to extend or refine the application of the primary legislation.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, 269SJ, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for certain goods. If the CEO is satisfied that the application meets the core criteria (sections 269C and 269B), they must make a written order 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 applies (section 269P). The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made (section 269K). A TCO is taken to have come into force on the day on which the application for the TCO was lodged (section 269S).
Under this Act, the CEO has specific obligations when considering a TCO application. The CEO must ensure 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 also decide if the application meets the core criteria by confirming that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (sections 269C and 269B). If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) and publish a notice in the Gazette inviting submissions from any interested parties (sections 269P and 269K). Additionally, 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 in respect of anything done or omitted to be done before the date of registration (section 269S).
There are no specific offences, penalties, or civil/criminal consequences outlined for breach of the Act. However, the CEO has the authority to make a TCO and must follow the prescribed process and criteria as outlined in the Act. If the CEO fails to adhere to these requirements, the validity of the TCO could be questioned, potentially leading to legal challenges or disputes regarding the tariff concessions granted. The Act focuses on establishing the framework for the creation and implementation of TCOs, rather than prescribing specific penalties for non-compliance.