EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949438
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 bag fillers and sealers on 18 December 2009.
Instrument
TCO No 0949438 was made on 12 March 2010. It declares that those certain bag fillers and sealers 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. 0949438 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 Tariff Concession Instrument No. 0949438, made under the Customs Act 1901, was enacted in 2010 to address the need for tariff concessions on specific goods. This instrument was introduced to facilitate the reduction of customs duty on certain goods, in this case, bag fillers and sealers, provided that no substitutable goods were produced in Australia in the ordinary course of business. The policy objective is to encourage the importation of goods that are not locally produced, thereby supporting industry competitiveness and potentially lowering costs for businesses reliant on these goods. The instrument was made by the Chief Executive Officer of Customs, following an application from George Weston Foods and after considering that no submissions were received in opposition to the concession. The instrument came into effect from the date the application was lodged, with no adverse effects on existing rights or liabilities of parties other than the Commonwealth.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCOs), provides a mechanism for reducing customs duty on certain goods, contingent upon the absence of substitutable goods being produced in Australia. Specifically, this legislation applies to any individual or entity that seeks to import goods eligible for a tariff concession, provided such goods are not those explicitly excluded under section 269SJ of the Act. The concessions are applicable nationwide, aligning with the federal jurisdiction of the Customs Act. The scope of the Act is further delineated by the core criteria, which stipulate that a TCO application must meet the condition that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. This instrument extends its reach by potentially being supplemented through subordinate instruments, ensuring flexibility in tariff management. Exclusions are strictly defined to maintain the integrity of the concession scheme, thereby preventing misuse or circumvention of the intended tariff relief.
Key Provisions
The Customs Act 1901, particularly Part XVA, sets up a framework whereby the Chief Executive Officer (CEO) of Customs can issue Tariff Concession Orders (TCOs) (sections 269C and 269P). This process allows for a lower rate of customs duty to be applied to specific goods if certain criteria are met. When an application for a TCO is made under section 269F, the CEO evaluates whether the application adheres to the core criteria set out in section 269C. If the application pertains to goods not listed in section 269SJ, and it is confirmed that no substitutable goods were produced in Australia at the time of application (section 269S), the CEO is required to issue a TCO.
The obligations imposed by the Act on the parties involved are quite clear. The CEO must ensure that applications are assessed against the stipulated criteria and must make a TCO if the application meets these criteria. The applicant, in this case George Weston Foods, must provide sufficient information to demonstrate that the goods for which the concession is sought are not substitutable by Australian-made products. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from interested parties regarding the application, as mandated by subsection 269K(1). In this instance, no submissions were received.
Should any party fail to comply with the requirements of the Act, there may be legal consequences. The Act does not explicitly detail the penalties for non-compliance; however, general provisions within the Customs Act 1901 apply. These could include civil or criminal penalties, depending on the nature and severity of the breach. For example, knowingly providing false or misleading information in an application could lead to criminal charges, with potential penalties including fines or imprisonment. Additionally, any failure to adhere to the terms of a TCO once issued could result in the revocation of the concession and possible duty arrears for the non-compliant party.