EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012436
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.
Tetra Pak Marketing Pty Ltd applied for a TCO in respect of certain beverage blenders on 11 March 2010.
Instrument
TCO No 1012436 was made on 28 May 2010. It declares that those certain beverage blenders 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. 1012436 is taken to have come into force on 11 March 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 Customs Act 1901 was enacted to provide for the administration of customs and excise duties and related matters, and includes provisions for the creation of Tariff Concession Orders (TCOs) to lower customs duty rates on certain goods. The Act was enacted by the Australian Parliament and aims to facilitate trade by reducing import costs where appropriate. One such measure, the Tariff Concession Instrument No. 1012436, was introduced to address the need for tariff concessions on specific goods that are not produced domestically. In this case, Tetra Pak Marketing Pty Ltd applied for a TCO for certain beverage blenders, which was granted on 28 May 2010, following a determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia. The concession resulted in these goods being subject to a zero rate of duty, down from the general rate of 5%. This measure was intended to benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date of 11 March 2010, without imposing any new liabilities.
Scope and Application
The Customs Act 1901 applies to all individuals, businesses, and entities involved in the importation and exportation of goods within Australia. Specifically, Tariff Concession Orders (TCOs) under Part XVA of the Act, such as TCO No. 1012436, apply to goods for which an application has been made and approved by the Chief Executive Officer of Customs. This Act extends to all states and territories within Australia and is administered at the national level. The application of TCOs is contingent upon the absence of substitutable goods being produced in Australia at the time of application, as defined under sections 269C, 269D, and 269E of the Act. Exclusions from this concession include goods specified in section 269SJ, which cannot be subject to a TCO. The Act allows for further specification and application through subordinate instruments, although in this case, no such extensions or restrictions are noted. The TCO No. 1012436 effectively reduces the customs duty on certain beverage blenders from the general rate of 5% to free, benefiting importers who can apply for duty refunds on imports since the TCO's effective date of 11 March 2010.
Key Provisions
The primary sections of the Tariff Concession Order No. 1012436 (section 269P(3)) under the Customs Act 1901 (section 269F) declare that certain beverage blenders are subject to a tariff concession, which reduces the customs duty from 5% to free. This concession is effective from the date the application was lodged, which was 11 March 2010 (subsection 269S(1)). The Chief Executive Officer of Customs (CEO) made this decision based on the criteria outlined in sections 269C and 269P of the Act, confirming that no substitutable goods were produced in Australia at the time the application was made (section 269D and section 269E).
The Act imposes specific obligations on both the CEO and applicants. For the CEO, there is a requirement to ensure that an application for a tariff concession order (TCO) is assessed against the criteria set out in the Act, particularly focusing on whether substitutable goods were produced in Australia at the time of application (section 269C). If the application meets these criteria, the CEO must make a written order declaring that the goods are subject to the concession (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). This transparency measure ensures that all relevant parties have the opportunity to provide input before a decision is made.
Failure to comply with the provisions of the Customs Act 1901 in relation to the TCO can result in significant consequences. While the explanatory statement does not specify penalties for non-compliance, the Act generally provides for both civil and criminal penalties for breaches of customs regulations. Civil penalties can include fines up to a maximum of $11,100 for individuals and $55,500 for corporations, depending on the severity of the breach. Criminal penalties can include imprisonment for up to five years, reflecting the seriousness of non-compliance with customs laws.
The tariff concession order does not disadvantage any person, other than the Commonwealth, who had rights as of the date of registration (subsection 269S(2)). Instead, it provides benefits to importers, who may apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). This provision ensures that importers are not negatively affected by the retrospective application of the TCO.