EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009471
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.
Floridia Cheese applied for a TCO in respect of certain cheese production line on 23 February 2010.
Instrument
TCO No 1009471 was made on 30 April 2010. It declares that those certain cheese production line 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. 1009471 is taken to have come into force on 23 February 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. 1009471, enacted under the Customs Act 1901, addresses the problem of providing tariff concessions for specific goods that are not produced in Australia, thus ensuring that Australian industries are not unduly disadvantaged. This instrument was introduced to facilitate tariff concessions for goods that are crucial for import but do not have local substitutes, thereby promoting fair trade practices and supporting industries that rely on imported goods. The instrument was enacted by the Chief Executive Officer of Customs in response to an application from Floridia Cheese regarding certain cheese production lines, reflecting a policy objective to support industry needs by reducing customs duties where local production does not exist. The instrument ensures that the rights of importers are protected and that the concession does not disadvantage any party by retroactively applying to the date the application was lodged.
Scope and Application
The Customs Act 1901 applies to the scope and application of Tariff Concession Orders (TCOs) for goods that are not produced in Australia in the ordinary course of business. This legislation enables the Chief Executive Officer of Customs to lower the rate of customs duty on specific goods by issuing a TCO upon application and after meeting certain criteria. The Act provides for the application process, where a person can apply for a TCO if the goods in question are not specified in section 269SJ of the Act and the CEO is satisfied that the application meets the core criteria, particularly that no substitutable goods are produced in Australia. The TCO scheme applies nationally, covering all imports of goods into Australia, subject to the conditions outlined in the Customs Act and the Customs Tariff Act 1995. While the Act broadly applies to all goods and importers, there are specific exclusions for goods listed in section 269SJ and any subordinate instruments may further refine or expand the application of the Act. The explanatory statement for Tariff Concession Instrument No. 1009471 provides a detailed example of the process, illustrating how an application for tariff concessions for cheese production lines was processed and approved.
Key Provisions
The Tariff Concession Instrument No. 1009471, made under the Customs Act 1901, pertains to a Tariff Concession Order (TCO) concerning certain cheese production lines. Under section 269F (1) of the Act, an applicant may submit a request to the Chief Executive Officer of Customs (CEO) for a TCO regarding specific goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, they must assess whether the application meets the core criteria outlined in section 269C. This criterion necessitates that on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO under section 269P(3), declaring that the specified goods are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995, with the duty rate specified in the order.
The obligations imposed by the Customs Act 1901 on the CEO include accepting valid TCO applications, evaluating whether they meet the core criteria, and making a decision on whether to issue a TCO. The Act also mandates that the CEO publish a notice in the Gazette, as per section 269K(1), inviting any interested party to lodge submissions opposing the TCO. In this case, the CEO did not receive any submissions. The TCO itself does not affect the rights of any person other than the Commonwealth or impose liabilities on any person regarding actions taken before the TCO's registration date, as stipulated in section 269S(1) of the Act.
Should any party violate the provisions of the Customs Act 1901 or the conditions of a TCO, they may face various consequences. While the explanatory statement does not detail specific offences or penalties for breaching the Act or TCOs, general provisions in the Customs Act typically include substantial penalties for non-compliance. These penalties can include fines and imprisonment for criminal offences, as well as financial penalties and legal proceedings for civil breaches. The exact penalties would depend on the nature and severity of the breach, as well as the specific provisions of the Act and any applicable regulations.