EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012503
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 pasteurisers on 11 March 2010.
Instrument
TCO No 1012503 was made on 04 June 2010. It declares that those certain beverage pasteurisers 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. 1012503 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, enacted by the Australian Parliament, establishes a framework for the administration of customs and excise duties. It includes provisions for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative framework aims to streamline the process for granting tariff concessions on specific goods, ensuring that businesses can efficiently apply for and obtain lower rates of customs duty where applicable. The policy objective of this mechanism is to foster economic efficiency and provide relief to businesses that import goods not produced domestically, thereby encouraging trade and investment. The explanatory statement regarding Tariff Concession Instrument No. 1012503 highlights the application process and the decision-making criteria, underscoring the importance of transparency and consultation in the legislative process.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the application and administration of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity seeking to import goods that are eligible for a reduced rate of customs duty, provided that the goods in question do not fall under the categories specified in section 269SJ, which are ineligible for a TCO. The Act stipulates that a TCO will only be granted if no substitutable goods are produced in Australia at the time of application. The instrument applies nationally across Australia, as it is a Commonwealth Act, and its effects are implemented through the Customs Tariff Act 1995. The TCO itself, such as TCO No. 1012503 for certain beverage pasteurisers, is effective from the date the application is lodged, with no retroactive application affecting pre-existing rights or liabilities. The CEO is mandated to publish a notice in the Gazette inviting submissions on the proposed TCO, although in this instance, no submissions were received. The application of this legislation can be extended or further defined through subordinate instruments, allowing for detailed regulations to support the overarching Act.
Key Provisions
The main operative sections of the Customs Act 1901 as they pertain to Tariff Concession Orders (TCOs) include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ (269C, 269B, 269D, 269E, 269F, 269P, 269SJ). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided they are not specified in section 269SJ which lists goods that cannot be subject to a TCO (269F). If the CEO is satisfied that the application meets the core criteria, such as there being no substitutable goods produced in Australia on the day the application was lodged, the CEO must make a written order (TCO) (269C). The TCO specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (269P(3)).
The obligations and requirements imposed by the Act on the parties or entities it governs are primarily centred around the application process for a TCO. The CEO must ensure that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (269K(1)). Additionally, the Act mandates that once a TCO is made, it is taken to have come into force on the day the application was lodged, and it does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities in respect of anything done or omitted to be done before the date of registration (269S(1)).
Under the Customs Act 1901, any breach of the provisions related to TCOs could lead to civil or criminal consequences, although the specific offences and penalties are not detailed in the provided text. Generally, the Act includes provisions for penalties and enforcement mechanisms to ensure compliance, but the exact penalties or civil/criminal consequences for a breach would depend on the nature and severity of the breach. For instance, penalties could range from fines to more severe criminal sanctions depending on the context and the discretion of the courts. However, the provided explanatory statement does not specify the maximum penalties or detailed consequences for breaches of the TCO provisions.