EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1047888
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.
Cedenco Australia Pty Ltd applied for a TCO in respect of certain tomato harvestors on 26 October 2010.
Instrument
TCO No 1047888 was made on 17 January 2011. It declares that those certain tomato harvestors 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. 1047888 is taken to have come into force on 26 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 Commonwealth Parliament, provides for a scheme under which Tariff Concession Orders (TCOs) can be issued to reduce the customs duty on certain goods. This was introduced to address the issue of ensuring that Australian businesses can access the goods they need at reduced costs, particularly when no domestic substitutes are available. Specifically, Tariff Concession Instrument No. 1047888, made on 17 January 2011, was issued in response to an application by Cedenco Australia Pty Ltd for tariff concessions on certain tomato harvesters. The policy objective is to facilitate trade by lowering the duty on imported goods where no suitable Australian-made alternatives exist, thus supporting economic efficiency and competitiveness. This particular instrument resulted in the zero-rating of customs duty on the specified tomato harvesters, which previously carried a 5% duty rate.
Scope and Application
The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that reduce the rate of customs duty on specified goods. This legislation applies to any individual or entity that seeks to import goods eligible for tariff concessions, provided the goods meet the core criteria set out in the Act. Specifically, a TCO can be applied for if no substitutable goods are produced in Australia on the date the application is lodged. The instrument, TCO No 1047888, was made on 17 January 2011 and specifies that certain tomato harvestors are subject to a TCO, resulting in a duty rate of free instead of the general rate of 5%. This instrument has a national reach within Australia and does not disadvantage any existing parties or impose new liabilities. Any interested party can submit a request for a TCO, but no submissions were received in response to the published notice for this particular order. The TCO applies retroactively to the date of the application, 26 October 2010, and benefits importers by allowing them to apply for a refund of duties paid on eligible goods imported since that date.
Key Provisions
The main operative sections of this legislation, found in the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs) which are designed to provide lower rates of customs duty on certain goods. Specifically, section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in relation to goods, provided the application is not in respect of goods specified in section 269SJ. Section 269C outlines the core criteria that a TCO application must meet, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order (a TCO) declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes several obligations and requirements on the parties involved. The CEO must decide whether an application for a TCO meets the core criteria outlined in section 269C. If the application is valid and meets these criteria, the CEO is required to make a written TCO under section 269P(3). Additionally, the CEO must publish a notice in the Gazette under subsection 269K(1) as soon as practicable after accepting the TCO application as valid, inviting submissions from any interested parties. This ensures transparency and provides an opportunity for stakeholders to voice their opinions on the proposed concession.
Any breaches of the provisions in the Customs Act 1901 can lead to civil or criminal consequences. For example, knowingly providing false or misleading information in an application for a TCO could result in criminal penalties, including fines or imprisonment, depending on the severity of the offence. Under the Customs Act 1901, penalties for offences can include fines up to $22,000 for individuals and $110,000 for corporations, as well as potential imprisonment terms. The specifics of penalties are detailed in the relevant sections of the Act and related legislation, and these can vary based on the nature and extent of the breach.