EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0944628
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.
Simplot Australia applied for a TCO in respect of certain bulky food products filling machines on 24 November 2009.
Instrument
TCO No 0944628 was made on 29 January 2010. It declares that those certain bulky food products filling machines 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. 0944628 is taken to have come into force on 24 November 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, establishes a framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). This Act aims to provide relief on customs duties for certain goods by allowing for the application of lower rates under specific circumstances. The Tariff Concession Instrument No. 0944628, issued under this Act, addresses the specific case of Simplot Australia’s application for tariff concessions on certain bulky food products filling machines. The instrument was introduced to ensure that these goods, which have no substitutable Australian-made equivalents, benefit from a reduced customs duty rate, facilitating their importation and potentially lowering costs for businesses importing these specific machines. This initiative aligns with the policy objective of supporting industries by reducing import costs for goods that cannot be produced domestically.
Scope and Application
The Tariff Concession Instrument No. 0944628 under the Customs Act 1901 applies to specific goods identified in the instrument, in this case, certain bulky food products filling machines. The legislation is enacted at the Commonwealth level and applies to entities or individuals importing these goods into Australia. The Act allows for tariff concessions on goods that are not substitutable and not produced in Australia, as determined by the Chief Executive Officer of Customs. The instrument was made following an application by Simplot Australia on 24 November 2009, and it came into effect on the same day as per the Act's provisions. The TCO reduces the duty on these goods from the general rate of 5% to free, thereby benefiting importers who may apply for refunds on duties paid prior to the instrument's effective date. The instrument does not impose any new liabilities or disadvantage any person other than the Commonwealth. Additionally, the instrument extends its application through the Customs Tariff Act 1995, which provides further details on the applicable tariff rates and schedule items.
Key Provisions
The primary sections of the Customs Act 1901 that pertain to Tariff Concession Orders (TCOs) include section 269F, which outlines the application process for TCOs, and section 269C, which sets out the core criteria for an application to be successful. Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. Under section 269C, the CEO must determine if the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the core criteria are met, the CEO must make a written order declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The applicant must ensure their application is made in accordance with section 269F and that the goods in question meet the criteria outlined in section 269C. The CEO, on receiving an application, is required to publish a notice in the Gazette under subsection 269K(1) and consider any submissions received. If the CEO determines that the application meets the core criteria, they must issue a written TCO under section 269P(3). Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person as at the date of registration, as stipulated in subsection 269S(1).
In the event of a breach of the provisions outlined in the Customs Act 1901, several penalties and consequences may apply. While the explanatory statement does not detail specific offences or penalties, the general legal framework of Australia provides for both civil and criminal penalties for breaches of customs regulations. Civil penalties can include fines, while criminal penalties may involve imprisonment, depending on the severity of the breach. The maximum penalties would be determined in accordance with the specific sections of the Act or any related legislation that is contravened. Importers may also have the right to apply for a refund of duty under paragraph 126(1)(r) of the Regulations if they have imported goods subject to a TCO since the day the TCO is taken to have come into force.