EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910926
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.
Quality Bakers Australia Pty Ltd applied for a TCO in respect of certain bread make up line on 31 March 2009.
Instrument
TCO No 0910926 was made on 19 June 2009. It declares that those certain bread make up line 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. 0910926 is taken to have come into force on 31 March 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, enacted by the Australian Parliament, established a framework for the regulation of customs duties and tariffs. Specifically, Part XVA of the Act introduced a scheme for Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to grant reduced customs duty rates on certain goods, provided they meet specified criteria. This legislative measure was introduced to address the need for tariff concessions that could promote industrial efficiency and competitiveness by reducing the cost of imported goods that have no domestic substitutes. The Tariff Concession Instrument No. 0910926, made on 19 June 2009, is an example of this scheme in action, granting a tariff concession on certain bread make-up lines, effectively reducing the duty from 5% to free. This instrument came into effect on 31 March 2009, the date the application was lodged, and does not affect the rights of any person prior to its registration.
Scope and Application
The Tariff Concession Instrument No. 0910926 applies to the specific goods, namely certain bread make-up lines, as determined by the Chief Executive Officer of Customs (CEO) under the Customs Act 1901. This instrument affects entities involved in the importation of these goods, particularly importers who may benefit from reduced or free customs duty rates. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia and its customs regulations. The application of the Act is restricted by the exclusions outlined in section 269SJ of the Customs Act 1901, which specifies certain goods that cannot be subject to a Tariff Concession Order (TCO). Additionally, the application process involves satisfying the core criteria as stipulated in sections 269C, 269B, and 269D of the Act, which relate to the production of goods in Australia and the concept of substitutable goods. The Act also extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the prescribed duty rates in Schedule 4. The Tariff Concession Instrument No. 0910926 does not disadvantage any person or impose liabilities on individuals for actions taken prior to the date of registration, thereby safeguarding the rights of all parties involved.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0910926 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer of Customs (the CEO) to make a written order if they are satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria (section 269C). Specifically, this means that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269B and 269E). The TCO declares that certain bread make-up lines are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby making the rate of duty for these goods free, as opposed to the general rate of 5% (section 269P(3)).
The obligations and requirements imposed by the Act on the parties governed by it include the necessity for a person to apply to the CEO for a TCO in respect of goods (section 269F). The CEO must then determine whether the application meets the core criteria by ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the application meets these criteria, the CEO must 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 also consider any submissions received before making the TCO. In this instance, no submissions were received, allowing the TCO to proceed.
Any breach of the obligations or requirements set out in the Act could potentially lead to civil or criminal consequences. However, the explanatory statement does not specify any particular offences or penalties for breaches of the TCO process itself. The focus is on the administrative process and the criteria that must be met for the CEO to grant a TCO. The primary consequences of non-compliance would likely stem from the incorrect application or implementation of the TCO, which could lead to disputes or challenges in the courts. Nonetheless, the explanatory statement does not provide specific details on the maximum penalties for such breaches.