EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0938936
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.
Fyna Foods Pty Ltd applied for a TCO in respect of certain chocolate making machine parts on 15 October 2009.
Instrument
TCO No 0938936 was made on 08 January 2010. It declares that those certain chocolate making machine parts 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. 0938936 is taken to have come into force on 15 October 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. 0938936, enacted under the Customs Act 1901, addresses the need for tariff concessions for specific goods that are not produced domestically, ensuring fair trade practices and economic benefits for businesses importing these goods. This instrument was introduced to streamline the process for granting tariff concessions, providing a structured approach for businesses to apply for and receive duty-free treatment on certain goods, provided they meet the core criteria outlined in the Act. The instrument was made by the Chief Executive Officer of Customs, reflecting the policy objective of facilitating trade by reducing customs duties on imported goods where domestic alternatives do not exist, thereby supporting economic efficiency and competitiveness. The instrument came into effect on the date the application was lodged, ensuring timely implementation of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0938936 under the Customs Act 1901 applies to specific goods, in this case, certain chocolate making machine parts, which are subject to a Tariff Concession Order (TCO). The Act allows the Chief Executive Officer of Customs (CEO) to grant tariff concessions if the goods in question are not produced in Australia in the ordinary course of business and if the application meets the core criteria outlined in the Act. The geographic reach of this legislation is national, impacting all entities and individuals involved in the importation of these goods within Australia. The instrument does not impose any liabilities or disadvantage any person, except the Commonwealth, who may benefit from the tariff concession. Additionally, the rights of importers are beneficially affected as they can apply for a refund of duty on goods imported since the TCO is taken to have come into force. The application of the Act may be extended or restricted through subordinate instruments, providing flexibility in its implementation.
Key Provisions
The key operative sections of the Customs Act 1901 that are pertinent to this Tariff Concession Order (TCO) include sections 269C, 269B, 269D, 269E, 269P, and 269S. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that a TCO application meets the core criteria, they must issue a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S(1) specifies that a TCO is effective from the day the application for the TCO was lodged. In this case, TCO No. 0938936 applies to certain chocolate making machine parts, which now have a duty rate of free instead of the general 5%.
The Act imposes specific obligations and requirements on the parties involved. The applicant, Fyna Foods Pty Ltd, must ensure that their application for a TCO is valid and meets the core criteria outlined in section 269C. The CEO of Customs has the duty to review the application and verify that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO determines that the application meets the criteria, they must issue a written TCO declaring the applicable tariff concessions. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. This transparency measure ensures that all stakeholders have an opportunity to voice their concerns.
Non-compliance with the provisions of the Customs Act 1901 can result in various consequences. The Act does not specify explicit offences or penalties for breaching the TCO provisions. However, any misuse or fraudulent activities related to the TCO could potentially lead to legal action under general customs laws, which may include fines and imprisonment. The Act ensures that the TCO does not affect the rights of persons (other than the Commonwealth) as at the date of registration, and it does not impose any liabilities on any person. Importers, however, may benefit from being able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.