EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1035070
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.
Simplot Australia applied for a TCO in respect of certain fish filleting processing line on 30 July 2010.
Instrument
TCO No 1035070 was made on 18 October 2010. It declares that those certain fish filleting processing line 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. 1035070 is taken to have come into force on 30 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for managing customs duties and tariffs, including the ability to issue Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods, provided that certain criteria are met, such as the absence of substitutable goods produced in Australia. The Act was designed to address the need for flexibility in customs duty rates to support Australian industry and trade. TCO No. 1035070, issued on 18 October 2010, pertains to certain fish filleting processing lines and was made in response to an application by Simplot Australia. This specific order grants a tariff concession, reducing the duty from 5% to free, effective from the date of the application, 30 July 2010. The process included a public consultation period with no objections received, aligning with the policy objective to ensure transparency and fairness in the tariff concession process.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to entities and individuals who seek a reduction in customs duty on specific goods by applying for a TCO. The Act ensures that such concessions are granted only if the goods in question are not produced in Australia in the ordinary course of business and there are no substitutable goods available domestically. The instrument in question, Tariff Concession Instrument No. 1035070, was made in response to an application by Simplot Australia for a concession on certain fish filleting processing lines, effective from 30 July 2010, the date of application. The CEO's decision to grant the concession was based on the absence of substitutable goods produced in Australia. The concession provides for a reduction in the duty rate from the general 5% to free, thereby benefiting importers who may apply for a refund of duties paid on these goods post the commencement of the TCO. The instrument does not impose any liabilities on any person and safeguards the rights of all parties as of the date of registration, ensuring no one is disadvantaged or incurs liabilities for actions prior to the TCO's registration.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 1035070, revolve around the process for applying for and granting a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided these goods are not those specified in section 269SJ, which are ineligible for a TCO. The CEO must then determine if the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO is required to make a written order under section 269P(3), declaring that the goods in question are subject to a prescribed tariff item in Schedule 4 to the Customs Tariff Act 1995. For the specific case of Simplot Australia’s application for a TCO on certain fish filleting processing lines, TCO No. 1035070 was issued on 18 October 2010, applying a zero rate of duty to these goods as no substitutable goods were produced in Australia.
The obligations imposed by this legislation primarily concern the CEO’s responsibility to evaluate TCO applications and ensure they meet the stipulated core criteria. Once an application is deemed valid and the core criteria are satisfied, the CEO must not only make the written order but also publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why the TCO should not be granted. This is in line with subsection 269K(1) of the Act. Additionally, the TCO must not adversely affect the rights of any person other than the Commonwealth and must not impose any liabilities on anyone in respect of actions taken before the TCO’s registration. The CEO’s duties also include ensuring the TCO comes into force on the date the application was lodged, as stated in subsection 269S(1).
In terms of breaches and penalties, the Customs Act 1901 does not specify particular offences, penalties, or consequences for non-compliance with the TCO provisions in this explanatory statement. However, non-compliance with the Customs Act in general can result in significant civil and criminal penalties. For example, providing false or misleading information in an application for a TCO could be considered an offence under section 246 of the Act, potentially leading to fines or imprisonment. The exact penalties would depend on the specific nature and severity of the breach, as well as any relevant case law or additional regulations. It is crucial for applicants and the CEO to adhere strictly to the legislative requirements to avoid any potential legal repercussions.