EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1017443
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.
Mars Food Australia applied for a TCO in respect of certain retort pouch loading and unloading machines on 15 April 2010.
Instrument
TCO No 1017443 was made on 02 July 2010. It declares that those certain retort pouch loading and unloading 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. 1017443 is taken to have come into force on 15 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 Tariff Concession Instrument No. 1017443 was enacted in 2010 under the Customs Act 1901 to address a specific need for tariff concessions on certain goods. This legislation was introduced to provide relief to businesses by reducing the customs duty on particular goods, in this case, retort pouch loading and unloading machines, thereby fostering economic efficiency and competitiveness within the Australian market. The instrument was created in response to an application by Mars Food Australia, seeking to lower the duty on these machines from the general rate of 5% to a duty-free status. The process was overseen by the Chief Executive Officer of Customs, who assessed the application against the core criteria outlined in the Customs Act, ensuring no substitutable goods were produced in Australia.
The enacting body for this instrument was the Australian Parliament, aiming to streamline the importation process and reduce costs for businesses without disadvantaging existing parties or imposing new liabilities. The policy objective was to encourage the import of necessary machinery by making it more affordable, thus potentially stimulating investment and innovation in the industry. This initiative reflects a broader effort to balance trade facilitation with the protection of domestic industries, ensuring that Australian businesses remain competitive in the global market.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of customs duty on imported goods, with the Tariff Concession Instrument No. 1017443 under this Act applying specifically to the tariff concessions granted for certain retort pouch loading and unloading machines. This Instrument was made on 2 July 2010 and came into effect on 15 April 2010, the date on which the application for the tariff concession was lodged. The instrument applies to the specific goods identified in the application, which are subject to a lower rate of customs duty as declared in the Instrument. The application of the Instrument is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia, meaning the imported goods are essential for a use that cannot be met domestically. The Instrument does not affect any pre-existing rights or liabilities except to the beneficial effect of allowing importers to apply for a refund of duty paid on the goods since the effective date of the Instrument. This Act applies on a national level across Australia, impacting entities and persons involved in the importation of these specific goods.
Key Provisions
The Tariff Concession Instrument No. 1017443 under the Customs Act 1901 (the Act) primarily deals with the establishment of Tariff Concession Orders (TCOs) (sections 269C, 269F, and 269P(3)). A TCO is an order made by the Chief Executive Officer of Customs (the CEO) that applies a lower rate of customs duty to specific goods. Section 269C outlines the core criteria that must be satisfied for an application for a TCO to be successful, which includes the condition that no substitutable goods were produced in Australia on the date the application was lodged (section 269D defines 'goods produced in Australia' and section 269E defines 'ordinary course of business'). In this particular instance, the CEO issued TCO No. 1017443 on 2 July 2010, declaring that certain retort pouch loading and unloading machines are subject to a TCO, as they are now subject to a free rate of duty instead of the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The Act imposes several obligations on parties applying for a TCO. Applicants must ensure that their application is lodged in accordance with section 269F and that it does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as required by subsection 269K(1) of the Act. Additionally, the CEO is mandated to decide whether the application meets the core criteria outlined in section 269C and, if satisfied, to issue a written TCO as per section 269P(3).
Breaching the obligations or requirements outlined in the Act can have serious legal consequences. While specific offences and penalties are not detailed within the explanatory statement, the Act itself provides for potential civil or criminal penalties for non-compliance with its provisions. In particular, failure to adhere to the terms of a TCO or any related duty obligations could result in penalties under the Customs Act 1901, which may include fines and, in more severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, but they are intended to ensure compliance with the customs duty regulations.