EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1032396
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.
Schweppes Australia Pty Ltd applied for a TCO in respect of certain beverage manufacturing dissolvers on 15 July 2010.
Instrument
TCO No 1032396 was made on 06 October 2010. It declares that those certain beverage manufacturing dissolvers 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. 1032396 is taken to have come into force on 15 July 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. 1032396, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, thereby facilitating trade by reducing customs duty rates. This instrument was developed in response to an application by Schweppes Australia Pty Ltd for a Tariff Concession Order (TCO) concerning certain beverage manufacturing dissolvers. The policy objective is to ensure that Australian businesses can access necessary goods without the burden of high customs duties, provided no substitutable goods are produced domestically. The Chief Executive Officer of Customs (CEO) was responsible for making the decision and publishing the order, which became effective from the date of the application, 15 July 2010. No submissions were received opposing the concession, and the TCO provides a benefit to importers by allowing them to apply for a refund of duty for goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the imposition of tariffs on imported goods, with specific provisions under Part XVA for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity seeking a reduction in the customs duty on particular imported goods, provided those goods are not specified in section 269SJ of the Act as ineligible for tariff concessions. The scope of the Act extends to the national level, impacting all entities involved in the importation of goods subject to a TCO within Australia. The Act requires the CEO to assess applications based on whether substitutable goods are produced in Australia, as defined under sections 269D, 269E and 269F, and whether the application meets the core criteria specified in section 269C. A TCO, once issued, reduces the customs duty to zero for the specified goods, as exemplified in TCO No 1032396 for certain beverage manufacturing dissolvers. The Act mandates consultation with the public, inviting submissions on proposed TCOs, although no submissions were received for this particular TCO. The commencement date of a TCO aligns with the date of the application, ensuring no retroactive liabilities are imposed on importers or other stakeholders.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901, provide the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269P(3)). These sections require that an application for a TCO be submitted and outline the criteria for consideration, including the requirement that no substitutable goods be produced in Australia in the ordinary course of business (section 269C). The Act defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' (sections 269D, 269E). If the CEO determines that the application meets the core criteria, they are mandated to issue a written TCO (section 269P(3)). This process was followed in the case of Schweppes Australia Pty Ltd's application for a TCO on certain beverage manufacturing dissolvers, which resulted in Tariff Concession Order No. 1032396 (section 269P(3)).
The Act imposes several obligations on the parties involved, particularly the CEO and applicants. The CEO is required to ensure that an application for a TCO is considered against the specified criteria (section 269C) and to make a TCO if the application meets these criteria (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons against the making of a TCO (subsection 269K(1)). In the instance of TCO No. 1032396, no submissions were received in response to the published notice. The applicant, in this case Schweppes Australia Pty Ltd, must submit a valid application detailing why the goods in question should qualify for a tariff concession.
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal consequences. The Act does not explicitly state the penalties for non-compliance; however, the nature of the breach would determine whether it is addressed under civil or criminal law. For instance, providing false information in an application could lead to criminal charges, while failure to adhere to the conditions of a TCO could result in civil penalties. It is important to note that the TCO itself does not impose any liabilities on any person other than the Commonwealth (subsection 269S(1)).
In summary, the Customs Act 1901 provides a structured approach for the creation of Tariff Concession Orders, requiring the CEO to assess applications against specific criteria and publish notices to invite public submissions. The obligations of the CEO and applicants are clearly defined, and while the Act does not specify penalties for non-compliance, the consequences would depend on the nature of the breach. The TCO in question, No. 1032396, effectively reduces the customs duty on certain beverage manufacturing dissolvers to zero, benefiting importers of these goods.