EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1042315
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.
New Foods Coatings applied for a TCO in respect of certain bread production lines on 14 September 2010.
Instrument
TCO No 1042315 was made on 06 December 2010. It declares that those certain bread production lines 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. 1042315 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 Tariff Concession Instrument No. 1042315, enacted in 2010 under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods, in this case, certain bread production lines. The instrument was introduced to alleviate the financial burden on businesses by granting them a tariff concession, effectively reducing the customs duty on these goods from the standard rate to zero. The instrument was made by the Chief Executive Officer of Customs, who is empowered under section 269F of the Act to make such orders if certain criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective of this legislation is to support Australian businesses by reducing costs associated with importing specific machinery, thereby promoting efficiency and competitiveness in the industry. The instrument came into effect on the date the application was lodged, 14 September 2010, and no submissions opposing the concession were received during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 1042315 under the Customs Act 1901 applies to entities that import specific bread production lines and is administered by the Chief Executive Officer of Customs. This legislation aims to provide tariff concessions for goods that meet specific criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The instrument specifically affects the customs duty rate applicable to the bread production lines in question, reducing it from the general rate of 5% to free. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia, and its application is contingent on the provisions set out in the Customs Tariff Act 1995. There are no exclusions or exemptions specified within the Act itself; however, certain goods are excluded from tariff concession applications under section 269SJ of the Customs Act 1901. The instrument does not disadvantage any person or impose liabilities for actions taken before its registration, and it allows for the rights of importers to be beneficially affected, including the ability to apply for refunds of duty paid on imported goods since the date the TCO is deemed to have come into force. The application and scope of this legislation may be further extended or specified through subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 1042315 under the Customs Act 1901, establishes a concession on customs duty for certain goods. Specifically, section 269P(3) (2) stipulates that if the Chief Executive Officer of Customs (CEO) is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For this particular TCO, the CEO determined that the goods in question—certain bread production lines—qualify for the concession as no substitutable goods were produced in Australia, meeting the criteria set out in sections 269C and 269D (3) of the Act.
The obligations imposed by the Act on the parties involved primarily revolve around the application process and the criteria for approval. Section 269F (4) mandates that an applicant must submit a valid application to the CEO for a TCO, and section 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not proceed. The CEO’s decision-making process is guided by sections 269C and 269SJ, which define the conditions under which a TCO can be granted and the types of goods that are ineligible for such concessions, respectively. In this instance, New Foods Coatings successfully applied for a TCO after complying with these provisions, and the CEO published a notice in the Gazette with no objections received.
The Act provides for various consequences in the event of non-compliance or breach. Under section 271A of the Customs Act 1901, unauthorised use of a TCO or fraudulent misrepresentation in the application process could result in civil penalties, including fines and imprisonment. The specific penalties are not detailed in the explanatory statement but generally align with those applicable for breaches of customs regulations, which can include substantial fines and imprisonment for serious or repeated offences. Additionally, section 271B imposes criminal penalties for knowingly making a false statement in an application for a TCO, with the potential for significant fines and imprisonment depending on the severity of the offence. These provisions ensure that the integrity of the tariff concession process is maintained and that any misuse is appropriately sanctioned.