EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949437
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.
George Weston Foods applied for a TCO in respect of certain dry and moist and viscous material mixers on 18 December 2009.
Instrument
TCO No 0949437 was made on 12 March 2010. It declares that those certain dry and moist and viscous material mixers 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. 0949437 is taken to have come into force on 18 December 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, facilitates the implementation of Tariff Concession Orders (TCOs) which allow for reduced rates of customs duty on specific goods. This legislative framework was introduced to address the need for economic efficiency and competitiveness by allowing the importation of goods at lower rates when no suitable domestic alternatives exist. The Tariff Concession Instrument No. 0949437, made in 2010, is an example of this mechanism in action, providing a concession for certain dry and moist and viscous material mixers, reducing the duty rate from 5% to free. The policy objective here is to support industries by lowering costs and encouraging the use of imported goods where domestic production does not meet the necessary standards or availability. This approach ensures that businesses can access the required materials without the burden of high customs duties, thereby promoting economic activity and innovation within the industry.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, reducing customs duty on specified goods. This legislative mechanism applies to any person or entity that applies for a TCO on behalf of goods not listed in section 269SJ of the Act, which are ineligible for tariff concessions. The scope of the Act is national, covering all of Australia, and it extends to any goods that are subject to the Customs Tariff Act 1995. Any TCO made under this Act is effective from the date the application is lodged, and it does not retroactively affect the rights of any person, nor does it impose any liabilities for actions taken before the order was registered. This instrument was applied to certain dry and moist and viscous material mixers, which now benefit from a duty-free status as of 18 December 2009, when the application was made.
Key Provisions
The key operative sections of the Customs Act 1901 as applied in Tariff Concession Instrument No. 0949437, include sections 269C, 269B, 269D, 269E, and 269F (sections referenced in parentheses). Section 269C sets out the core criteria that a Tariff Concession Order (TCO) application must meet, which is primarily based on the absence of substitutable goods produced in Australia. Section 269B provides definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, while section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be issued. The TCO declares that the specified goods are subject to a prescribed tariff rate as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed on the parties by this Act revolve around the application and approval process for a TCO. The applicant, in this case George Weston Foods, must ensure that their application meets the core criteria specified in section 269C. This involves demonstrating that no substitutable goods are produced in Australia at the time of the application. The CEO, upon receiving a valid application, must then determine if the application satisfies the core criteria. If satisfied, the CEO is required to issue a written TCO as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO, although no such submissions were received in this instance.
In terms of consequences for breach, the Act does not explicitly detail offences or penalties for non-compliance with the TCO provisions. However, any failure to adhere to the stipulated criteria for issuing a TCO or any fraudulent application process could potentially lead to civil or criminal consequences under other relevant sections of the Customs Act 1901. The Act ensures that the TCO does not affect existing rights of any person, except the Commonwealth, and does not impose any new liabilities on individuals or entities other than the Commonwealth. The rights of importers are protected and can benefit from the TCO by applying for a refund of duty on goods imported since the TCO is deemed to have come into force.