EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914357
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.
Auction Alliance applied for a TCO in respect of certain buffet food warmers on 30 April 2009.
Instrument
TCO No 0914357 was made on 24 July 2009. It declares that those certain buffet food warmers 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. 0914357 is taken to have come into force on 30 April 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 Parliament of Australia, provides a framework for the administration of customs duties, including the ability to issue Tariff Concession Orders (TCOs) to reduce customs duties on certain goods. The Tariff Concession Instrument No. 0914357 was introduced to address the specific issue of applying tariff concessions to certain buffet food warmers. This instrument was created to facilitate the reduction of customs duty for these goods from the general rate of 5% to zero, following an application by Auction Alliance on 30 April 2009. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for the concession. The instrument came into effect on the date the application was lodged, 30 April 2009, and does not affect the rights of persons other than the Commonwealth, ensuring that importers can apply for a refund of any duties paid since that date.
Scope and Application
The Tariff Concession Instrument No. 0914357, made under the Customs Act 1901, applies to certain buffet food warmers as specified in the instrument. This Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), enabling a lower rate of customs duty on goods that meet specific criteria. The application process involves an assessment by the CEO to ensure that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. For the buffet food warmers, the CEO determined that no such substitutable goods were produced in Australia, thus meeting the core criteria for the concession. The instrument specifically declares that these goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, reducing the duty from the general rate of 5% to free. The instrument's application is limited to the specific goods mentioned and does not extend to any other goods unless similarly applied for and approved. This TCO became effective from the date the application was lodged, which is 30 April 2009.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0914357 under the Customs Act 1901, specifically sections 269C, 269F, and 269P, outline the process for applying for and receiving a Tariff Concession Order (TCO). According to section 269F, any person can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided these goods are not those listed in section 269SJ which cannot be subject to a TCO. If the CEO determines that the application meets the core criteria set out in section 269C—meaning no substitutable goods were produced in Australia in the ordinary course of business—the CEO must issue a written TCO. This is further clarified by section 269E, which defines 'ordinary course of business' and section 269D, which defines 'goods produced in Australia'. The TCO, when issued, will declare that the specified goods are subject to a lower rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must ensure that the application complies with the criteria in section 269C before issuing a TCO. This involves verifying that no substitutable goods were produced in Australia at the time of the application. Additionally, under section 269K, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made. The CEO must consider these submissions before making a final decision. Furthermore, section 269S stipulates that the TCO comes into force on the day the application is lodged, meaning the process is intended to be efficient and transparent.
Failing to comply with the requirements of the Customs Act 1901 and the associated regulations can lead to various consequences. While the explanatory statement does not explicitly detail the penalties for non-compliance, it is reasonable to infer that breaches of the Act may result in civil or criminal penalties. Typically, such breaches could involve fines, imprisonment, or both, depending on the severity of the offence. Under Australian law, the maximum penalties for customs-related offences can be significant, including substantial fines and lengthy prison sentences for serious violations. It is also important to note 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 liabilities on any person, as stipulated in section 269S(1).