EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1042810
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.
Khs Pacific applied for a TCO in respect of certain cheese block de bagging machines on 17 September 2010.
Instrument
TCO No 1042810 was made on 13 December 2010. It declares that those certain cheese block de bagging 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. 1042810 is taken to have come into force on 17 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 Australian Parliament, provides a framework for the regulation of customs and excise through the establishment of a tariff system. Specifically, Part XVA of the Act outlines the process for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (CEO), which allow for lower customs duty rates on certain imported goods. This legislative mechanism was introduced to address the need for targeted tariff reductions that can stimulate specific sectors of the economy, encourage the import of goods that are not domestically produced, and thus support economic growth and competition within Australia. The explanatory statement for Tariff Concession Instrument No. 1042810, issued on 13 December 2010, provides an example of this process, where a concession was granted on cheese block de-bagging machines, reducing the duty from the general rate of 5% to free. The policy objective behind this specific TCO, as with others, is to ensure that the Australian market remains competitive and accessible for essential goods that are not locally produced.
Scope and Application
The Tariff Concession Instrument No. 1042810, made under the Customs Act 1901, applies to entities seeking to import cheese block de bagging machines into Australia. This instrument was issued in response to an application by Khs Pacific and provides a tariff concession by setting the duty on these specific goods to zero, thereby exempting them from the general 5% duty rate. The application of this Instrument is confined to the goods specified within the Instrument itself and is effective from the date of the application, 17 September 2010. The Instrument does not affect the rights of any party as they stood prior to its registration and does not impose any liabilities on persons other than the Commonwealth. This Instrument does not extend to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order. The scope of this Instrument can be further defined or extended by subordinate instruments issued under the authority of the Customs Act 1901.
Key Provisions
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. These orders enable the application of a lower rate of customs duty on specified goods, as outlined in section 269F. A TCO application is considered valid if it pertains to goods not listed in section 269SJ, which includes goods that cannot be subject to a TCO. Furthermore, the application must meet the core criteria, which are detailed in section 269C, requiring that on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P(3) respectively.
Entities subject to the Act, such as importers, must ensure their applications for a TCO comply with the core criteria set forth in the Act. They must also be aware of the obligation to submit their applications in a timely manner and be prepared to respond to any submissions or objections raised by the CEO, as required by section 269K(1). The CEO must publish a notice in the Gazette once an application is accepted, inviting any interested parties to lodge submissions if they believe the TCO should not be made. This transparency measure ensures that all relevant interests are considered before a TCO is issued.
Breach of the conditions set out in the Act or failure to comply with the CEO's requirements can result in civil or criminal consequences. While the specific offences and penalties are not detailed in the provided text, it is clear that any misuse of the TCO provisions could lead to legal ramifications. For instance, submitting a false application or misrepresenting information could be considered an offence under the Customs Act 1901, potentially resulting in fines or other penalties as prescribed by the law. The Act also ensures that the rights of individuals are protected, and no liabilities are imposed on them in respect of actions taken before the TCO's registration date, which in this case is 17 September 2010.