EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1015694
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.
McCain Foods (Aust) Pty Ltd applied for a TCO in respect of certain lifting and tipping machines on 01 April 2010.
Instrument
TCO No 1015694 was made on 25 June 2010. It declares that those certain lifting and tipping 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. 1015694 is taken to have come into force on 01 April 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, provides a framework for the regulation of customs and excise in Australia. One of the mechanisms introduced under this Act is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duty on certain imported goods. This was introduced to address the need for tariff concessions to facilitate trade and ensure that Australian industries have access to necessary imported goods without undue financial burden. The Tariff Concession Instrument No. 1015694, issued on 25 June 2010, is an example of this mechanism in action, specifically concerning McCain Foods (Aust) Pty Ltd's application for a TCO on certain lifting and tipping machines. The instrument effectively grants a duty-free status to these machines, provided no substitutable goods are produced in Australia, thereby supporting the policy objective of promoting efficient trade practices while safeguarding local industries.
Scope and Application
The Tariff Concession Instrument No. 1015694 under the Customs Act 1901 applies to certain lifting and tipping machines in respect of which McCain Foods (Aust) Pty Ltd made an application for a Tariff Concession Order (TCO). This instrument is pertinent to entities engaged in the importation of these specific machines, granting them a concession on customs duties as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act applies on a national level, governed by the Commonwealth, and extends to any person or entity importing the specified goods into Australia. The TCO was issued after the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were produced in Australia, thus fulfilling the core criteria under section 269C of the Customs Act 1901. The instrument does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on any person, while potentially benefiting importers by allowing them to apply for a refund of duty on imports made since the effective date of the TCO. The Act's application can be further detailed or restricted through subordinate instruments as necessary.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1015694 pertain to the making of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). When an application for a TCO is made, the Chief Executive Officer of Customs (CEO) must consider whether the application meets the core criteria, particularly that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order that declares the specified goods to be subject to a reduced rate of customs duty (section 269P(3)). In this case, McCain Foods (Aust) Pty Ltd applied for a TCO for certain lifting and tipping machines, and the CEO was satisfied that no substitutable goods were produced in Australia, resulting in a concession that these machines would be subject to a duty rate of free instead of the general 5% rate.
The obligations imposed on parties by this legislation primarily focus on the CEO's responsibilities. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ of the Act, which are ineligible for a TCO. Upon receiving an application, the CEO must promptly publish a notice in the Gazette inviting submissions from any interested parties who may have objections to the TCO (subsection 269K(1)). If no objections are received, the CEO must then determine if the application meets the core criteria, and if so, make the written order declaring the goods to be subject to a TCO (section 269P(3)). Additionally, the CEO must ensure that the rights of importers are beneficially affected by the TCO, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
In terms of consequences for non-compliance, the Customs Act 1901 does not explicitly state offences or penalties for breaches of the TCO provisions. However, any failure by the CEO to properly assess an application or make an order in accordance with the Act may be subject to review and remedy through administrative law principles, including judicial review. Importers who do not comply with the requirements for a duty refund under the TCO may face administrative penalties, including fines or other civil consequences as determined by the relevant authority. While specific maximum penalties are not detailed in the text, general penalties for customs-related offences under the Customs Act can include substantial fines and, in serious cases, imprisonment.