EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1001491
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.
Gelita Australia applied for a TCO in respect of certain gelatine processing machines
on 08 January 2010.
Instrument
TCO No 1001491 was made on 08 April 2010. It declares that those certain gelatine processing 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. 1001491 is taken to have come into force on 08 January 2010.
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. 1001491 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific imported goods. This legislative instrument was introduced by the Australian Government to streamline the application process for tariff concessions, ensuring that businesses can access lower customs duty rates on goods that are not produced in Australia. The Customs Act 1901, managed by the Parliament of Australia, aims to facilitate trade by reducing the customs duty on eligible goods, thus encouraging economic efficiency and competitiveness. The policy objective behind this instrument is to provide relief to businesses that rely on importing certain goods that are not manufactured domestically, thereby reducing the overall cost of these goods and potentially increasing their availability in the market.
Scope and Application
The Tariff Concession Instrument No. 1001491, made under the Customs Act 1901, applies specifically to certain gelatine processing machines, as declared in the Instrument. The Act governs the application and implementation of Tariff Concession Orders (TCOs), which are designed to reduce the customs duty rate on specific goods, provided certain conditions are met. This Instrument was made in response to an application by Gelita Australia, and it came into force on 8 January 2010. The primary effect of this TCO is to apply a free rate of customs duty on the specified gelatine processing machines, replacing the general rate of 5% as stipulated in item 50 of Schedule 4 to the Customs Tariff Act 1995. The Instrument does not affect any pre-existing rights or liabilities of persons other than the Commonwealth and is intended to benefit importers by potentially entitling them to a refund of duty paid on these goods imported since the TCO's effective date. The geographic reach of this legislation is national, applying across Australia, and the process involves consultation and publication requirements as outlined in the Customs Act 1901.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, allow for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). An application for a TCO can be made by any person for goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must decide if the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). If these criteria are satisfied, the CEO must make a written order, a TCO, applying a prescribed rate of duty to the goods specified in the order (section 269P(3)).
The Act imposes certain obligations on the parties involved. The CEO must assess the validity of the TCO application against the specified criteria and ensure that no substitutable goods are produced in Australia. The CEO is also mandated to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be granted (subsection 269K(1)). Gelita Australia, in this case, fulfilled their obligation by applying for the TCO for certain gelatine processing machines on 08 January 2010.
Failure to comply with the requirements set forth in the Customs Act 1901 could result in various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can lead to civil or criminal penalties, including fines and imprisonment. The exact penalties would be determined by the courts based on the severity and nature of the breach. In this particular case, the TCO No. 1001491 was made on 08 April 2010, declaring that the specified gelatine processing machines are to be subject to a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. The rights of importers will be positively affected, allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force on 08 January 2010.