EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905024
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.
Smiths Snackfood Company applied for a TCO in respect of certain crisps seasoning and distribution lines on 13 February 2009.
Instrument
TCO No 0905024 was made on 08 May 2009. It declares that those certain crisps seasoning and distribution lines 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. 0905024 is taken to have come into force on 13 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 Customs Act 1901, as amended, includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. Enacted by the Parliament of Australia, this legislation was introduced to address the need for a streamlined process in granting tariff concessions on certain goods, thereby encouraging trade and reducing costs for importers. The objective is to facilitate easier access to goods that are not produced domestically, thus benefiting consumers and businesses alike. The CEO is tasked with deciding whether an application for a TCO meets the core criteria, which include ensuring that no substitutable goods are produced in Australia. Following the application by Smiths Snackfood Company for tariff concessions on specific crisps seasoning and distribution lines, TCO No. 0905024 was issued on 8 May 2009, reducing the duty rate from 5% to free for these goods, effective from 13 February 2009.
Scope and Application
The Tariff Concession Instrument No. 0905024 under the Customs Act 1901 applies to individuals and entities who seek tariff concessions for specific goods that are imported into Australia. It is applicable to those goods which are subject to a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs (CEO), provided they meet the criteria set out in the Act, notably that no substitutable goods are produced in Australia at the time the application is made. This legislation extends to all goods that are specified in the application, provided they do not fall under the exclusions outlined in section 269SJ of the Act. Geographically, the Act applies on a national level within Australia, as it is a Commonwealth Act. The Act allows for the possibility of extending its application through subordinate instruments, which would be subject to the conditions and criteria set out in the primary legislation. However, no exclusions, exemptions, or specific thresholds are mentioned in the explanatory statement beyond those referenced in section 269SJ of the Act.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0905024 provide for a reduction in the customs duty on certain crisps seasoning and distribution lines, effective from the date the application for the tariff concession order (TCO) was lodged (subsection 269S(1) of the Customs Act 1901). Section 269C of the Act stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia at the time the application was made, while section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied the application meets these criteria, a TCO must be issued. The instrument declares that the certain crisps seasoning and distribution lines are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5% (subsection 269P(3)).
The Act imposes certain obligations on the parties involved, particularly the CEO of Customs. Once an application is deemed valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be issued (subsection 269K(1) of the Customs Act 1901). In this case, no submissions were received. The CEO is also required to ensure that the application meets the core criteria, which involves confirming that no substitutable goods were produced in Australia at the time of the application (section 269C of the Customs Act 1901). Additionally, the Act mandates that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any new liabilities on any person (subsection 269S(2) of the Customs Act 1901).
The Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches of the TCO provisions within the explanatory statement. However, it is understood that any misuse or non-compliance with the terms of the TCO could potentially lead to legal repercussions under the broader customs legislation, including fines or other penalties as prescribed by the relevant statutes. The Act ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). The Act also ensures that the TCO does not impose any liabilities on any person (subsection 269S(2) of the Customs Act 1901).