EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052069
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.
Gourmet Innovators Pty Ltd applied for a TCO in respect of certain electrothermic cooking and smoking ovens on 24 November 2010.
Instrument
TCO No 1052069 was made on 28 February 2011. It declares that those certain electrothermic cooking and smoking ovens 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. 1052069 is taken to have come into force on 24 November 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 Parliament of Australia, addresses the need for a streamlined process to provide tariff concessions on specific goods, facilitating more efficient trade practices. The Act empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which apply a lower rate of customs duty to goods that meet certain criteria. The objective of the Act is to support industries by reducing the cost of imported goods that do not have Australian-made alternatives. Tariff Concession Instrument No. 1052069, made in 2011, is an example of this process in action, where Gourmet Innovators Pty Ltd successfully applied for a tariff concession on certain electrothermic cooking and smoking ovens. This instrument was implemented following a process of public consultation and consultation with relevant stakeholders, and it became effective on the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods, granting them a lower rate of customs duty as specified in Schedule 4 to the Customs Tariff Act 1995. This legislative scheme is applicable to any person or entity seeking to import goods that meet the criteria set out in the Act. The application process requires the applicant to demonstrate that the goods in question are not produced in Australia and that there are no substitutable goods available in the Australian market. This ensures that Australian businesses are not unfairly disadvantaged by the concession. The TCO mechanism operates on a national level, as it pertains to the federal Customs Act. However, the impact of a TCO is felt at the importer level, as importers of the specified goods will benefit from the reduced duty rate. Importantly, the TCO does not affect any pre-existing rights or liabilities incurred before the order's effective date, thus maintaining legal certainty for all parties involved.
Key Provisions
The main sections of the Customs Act 1901 pertinent to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269SJ (paragraphs 1-2). Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria, such as the absence of substitutable goods produced in Australia, a TCO is issued under section 269P(3). The TCO specifies the goods subject to reduced customs duty rates as outlined in Schedule 4 of the Customs Tariff Act 1995. For instance, TCO No 1052069, issued on 28 February 2011, applies to certain electrothermic cooking and smoking ovens, reducing the duty rate from 5% to free.
The Customs Act 1901 imposes several obligations on the CEO regarding the process for issuing TCOs. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which excludes certain goods from TCO eligibility (paragraph 2). Once an application is deemed valid, the CEO is required to publish a notice in the Gazette under section 269K(1) inviting any interested parties to lodge submissions if they believe the TCO should not proceed. In the case of TCO No 1052069, no submissions were received in response to this invitation (paragraph 4). Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in relation to actions taken before the TCO's registration date (paragraph 6).
Breaching the provisions of the Customs Act 1901 can result in both civil and criminal consequences. While the explanatory statement does not detail specific penalties, the Act generally allows for fines and imprisonment for breaches related to customs duties and regulations. The severity of penalties would depend on the nature and extent of the breach, with potential maximum penalties varying based on the specific circumstances of the offence.
The issuance of TCO No 1052069 effectively reduces the customs duty on certain electrothermic cooking and smoking ovens to zero, benefiting importers who can apply for duty refunds on imports made since the TCO's effective date of 24 November 2010. This reduction in duty rates aims to promote the import of these goods by making them more competitively priced compared to domestically produced alternatives. The TCO's terms ensure that no existing rights or liabilities are adversely affected for actions taken prior to its registration, maintaining legal certainty for all parties involved.