EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1042168
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.
A N Cooke Manufacturing applied for a TCO in respect of certain nuts on 14 September 2010.
Instrument
TCO No 1042168 was made on 20 December 2010. It declares that those certain nuts 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. 1042168 is taken to have come into force on 14 September 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 Commonwealth Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This Act addresses the issue of ensuring fair trade practices by providing mechanisms through which certain goods can benefit from reduced customs duties, provided they meet specific criteria. The primary objective of this legislative instrument, as evidenced by its explanatory statement, is to facilitate tariff concessions for goods that are not produced in Australia and for which no substitutable goods exist domestically. A N Cooke Manufacturing's application for a TCO concerning certain nuts exemplifies this process, where the CEO determined that the nuts qualified for a tariff concession, resulting in a reduction of the duty rate from 5% to free. This legislative measure ensures that Australian importers of such goods can potentially claim refunds for duties paid prior to the TCO's effective date, without imposing any new liabilities on parties involved.
Scope and Application
The Tariff Concession Instrument No. 1042168, made under the Customs Act 1901, applies specifically to certain nuts, which are designated as goods subject to a Tariff Concession Order (TCO). This instrument targets the industry involved in the importation and production of these nuts, facilitating their entry into Australia at a reduced or free rate of customs duty, provided no substitutable goods are produced in Australia in the ordinary course of business. The instrument's application is nationwide, encompassing all territories within Australia, and is administered under the Commonwealth's jurisdiction. The exclusions, as outlined in section 269SJ of the Act, pertain to goods that cannot be subject to a TCO, although the specific exclusions are not detailed in the explanatory statement. The application of the TCO is also extendable or modifiable through subordinate instruments, thereby allowing the Chief Executive Officer of Customs to adjust the scope and conditions as necessary. The TCO provides a benefit to importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, without imposing any liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of the Tariff Concession Order No. 1042168 (TCO No. 1042168) under the Customs Act 1901 (section 269C, 269B, 269E, 269D, 269P(3), and 269K(1)) establish the conditions under which the Chief Executive Officer (CEO) of Customs can grant tariff concessions. If the CEO is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, including that no substitutable goods were produced in Australia on the day the application was lodged, they must make a written order (section 269P(3)). This written order, TCO No. 1042168, declares that the goods in question are subject to the lower duty rate specified in the order.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person can apply to the CEO for a TCO concerning specific goods, provided the goods are not those specified in section 269SJ, which lists goods that cannot be subject to a TCO (section 269F). The CEO must then determine whether the application meets the core criteria, particularly ensuring that no substitutable goods were produced in Australia (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, and consider these submissions before making a decision (section 269K(1)).
In terms of consequences for non-compliance, the Act does not specify any particular offences or penalties for breach related to the issuance or application of a TCO. However, the Act ensures that the implementation of a TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO's effective date (subsection 269S(1)). This provision protects the rights of importers, who can apply for a refund of duty on goods imported since the TCO's effective date (Regulation 126(1)(r)). The TCO itself does not impose any liabilities on any person.