EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1053815
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.
SPC Ardmona applied for a TCO in respect of certain programmable logic controlled fruit preserving lines on 8 December 2010.
Instrument
TCO No 1053815 was made on 7 March 2011. It declares that those certain programmable logic controlled fruit preserving 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. 1053815 is taken to have come into force on 8 December 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 was enacted by the Parliament of Australia to provide for the administration of customs and excise and to provide for related matters. In the context of tariff concessions, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislative framework was introduced to address the need for streamlined and efficient processes for applying for tariff concessions on certain goods, ensuring that businesses can access lower rates of customs duty where appropriate. The objective is to foster a competitive environment by reducing the cost of importing specific goods, thereby supporting economic activity and trade. The Tariff Concession Order No. 1053815, made in 2011 in response to an application from SPC Ardmona for certain programmable logic controlled fruit preserving lines, exemplifies this process. The instrument declares that these specific goods are subject to a lower rate of duty, specifically free of charge, as no substitutable goods were produced in Australia at the time of the application.
Scope and Application
The Tariff Concession Instrument No. 1053815 under the Customs Act 1901 applies to programmable logic controlled fruit preserving lines that SPC Ardmona sought to have recognised under a Tariff Concession Order (TCO). This instrument applies to those specific goods and is limited to the context of customs duty concessions. The legislation enables the Chief Executive Officer of Customs to grant a TCO for goods that do not have substitutable goods produced in Australia in the ordinary course of business. This Act applies to the Commonwealth jurisdiction and affects the rights of importers by allowing them to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force, which is 8 December 2010. The Act does not impose any liabilities on any person and ensures that no person other than the Commonwealth is disadvantaged by the application of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C (core criteria for TCOs), 269F (application process for TCOs), and 269P (making of TCOs). Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods, provided that the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, set out in section 269C, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thus applying a lower rate of customs duty.
The Act imposes several obligations and requirements on the parties involved. For example, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). If no submissions are received, the CEO can proceed with making the TCO. Additionally, the CEO must ensure that the application meets the core criteria, which include the condition that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Once the TCO is made, importers of the specified goods can apply for a refund of duty on goods imported since the TCO came into force, which is the day the application was lodged (paragraph 126(1)(r) of the Regulations).
Offences, penalties, or consequences for breach of the Act are not explicitly detailed in the provided text. However, it is implied that non-compliance with the Act’s provisions, such as making a TCO without meeting the core criteria, could lead to legal challenges or disputes. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it does not impose any liabilities on any person. The consequences of not adhering to the Act's requirements could include the invalidation of the TCO or other legal remedies available to aggrieved parties.