EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1047579
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.
Borgcraft Pty Ltd applied for a TCO in respect of certain filo pastry production line on 22 October 2010.
Instrument
TCO No 1047579 was made on 10 January 2011. It declares that those certain filo pastry production 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. 1047579 is taken to have come into force on 22 October 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, serves as the legislative foundation for regulating customs and excise duties in Australia. It establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The problem this legislation addresses is the need to facilitate the importation of specific goods by reducing or eliminating customs duties, provided certain conditions are met, thereby promoting trade and economic efficiency. Enacted to streamline the importation process and support business operations, the Act aims to ensure that goods which are not produced domestically, and for which no suitable domestic substitutes exist, can be imported at reduced tariff rates. This encourages trade and economic growth by making imported goods more competitively priced within the Australian market.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that reduce or exempt customs duties on certain goods. This applies to any person or entity seeking to import goods that meet the criteria for a TCO, such as goods that are not produced in Australia and for which no suitable substitute is available. The application process involves submitting a request to the CEO, who then evaluates whether the goods meet the specified core criteria. If satisfied, the CEO issues a TCO, as seen in the case of Borgcraft Pty Ltd's application for a filo pastry production line. The geographic scope of this legislation is national, as it applies across Australia under the Commonwealth's authority. The TCO does not disadvantage any existing rights of individuals or entities and does not impose new liabilities; rather, it potentially benefits importers by allowing them to apply for duty refunds on goods imported after the TCO's effective date. The Act allows for further specification and regulation through subordinate instruments, which can define additional details or exceptions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1047579, as outlined in the explanatory statement, are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) concerning specific goods. Section 269C sets out the core criteria that must be met for an application to be approved, which includes the requirement that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P mandates that if the CEO is satisfied the application meets the core criteria, a written TCO must be made. Finally, section 269S provides that the TCO comes into force on the day the application was lodged.
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the application and assessment process for a TCO. The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. If the application is valid, the CEO must then verify whether it meets the core criteria outlined in section 269C. This includes confirming that no substitutable goods are produced in Australia on the day the application was made. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. The CEO must also consider any submissions received in making their decision.
The explanatory statement does not detail any specific offences, penalties, or consequences for breach of the Act or the TCO. However, it is reasonable to infer that failure to comply with the provisions of the Customs Act 1901 or the TCO could potentially lead to legal consequences. This might include civil or criminal penalties as prescribed under the relevant sections of the Customs Act or other applicable laws. The exact penalties would depend on the nature and severity of the breach, and would be determined in accordance with Australian law.
In summary, the Tariff Concession Instrument No. 1047579 and the accompanying explanatory statement provide a clear framework for the application and approval of TCOs under the Customs Act 1901. The key provisions and requirements are detailed in sections 269C, 269F, 269P, and 269S. While the explanatory statement does not explicitly mention penalties for breach, it is understood that non-compliance with the Act or the TCO could result in legal consequences.