EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1118204
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.
Nestle Purina Petcare applied for a TCO in respect of certain dryers on 08 June 2011.
Instrument
TCO No 1118204 was made on 29 August 2011. It declares that those certain dryers 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. 1118204 is taken to have come into force on 08 June 2011.
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 Tariff Concession Instrument No. 1118204, enacted in 2011, addresses the need for tariff concessions under the Customs Act 1901 to facilitate the importation of certain goods by providing a reduced rate of customs duty. This instrument was introduced to assist businesses by reducing financial burdens associated with importing specific goods. The Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise, including the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs). The policy objective of this particular TCO was to allow Nestle Purina Petcare to import certain dryers at a duty-free rate, provided no substitutable goods were produced in Australia at the time of the application. The instrument was created following an application by Nestle Purina Petcare and was effective from the date of the application, 08 June 2011, without imposing any liabilities on importers or affecting existing rights.
Scope and Application
The Tariff Concession Instrument No. 1118204 applies to entities such as Nestle Purina Petcare that have applied for and been granted a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901. Specifically, it applies to certain dryers which are now subject to a concessional rate of customs duty as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act applies on a Commonwealth level, with the CEO of Customs having the authority to make decisions regarding the application and implementation of TCOs. The legislation does not apply to goods specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. The application of the TCO is limited to goods imported after the date on which the TCO was taken to have come into force, 08 June 2011, and does not affect the rights of any person with respect to actions taken prior to this date. The TCO also does not impose any liabilities on any person, except for the Commonwealth, as clarified under paragraph 126(1)(r) of the Regulations, which allows for duty refunds on eligible goods imported since the commencement date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1118204, issued under the Customs Act 1901, include sections 269C, 269F, 269P, and 269SJ (subsections 269K(1) and 269S(1)). Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), which applies a lower rate of customs duty to the goods in question. Section 269C outlines the core criteria that must be met for an application to be considered, primarily focusing on the absence of substitutable goods produced in Australia. Section 269P(3) mandates that if the CEO is satisfied with the application, they must issue a written TCO. The commencement of the TCO, as per subsection 269S(1), is deemed to occur on the date the application was lodged, and this date is also when the tariff concession becomes effective.
The Act imposes several obligations on parties involved with TCOs. The CEO must ensure that any application for a TCO is assessed against the core criteria specified in section 269C. If the CEO determines that the application meets these criteria, they must proceed to issue a TCO, as mandated by section 269P(3). Additionally, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested parties to submit objections or submissions regarding the TCO. This transparency measure ensures that all stakeholders have the opportunity to voice any concerns they might have about the proposed tariff concession.
Failure to comply with the requirements set forth by the Customs Act 1901 can result in various penalties. While the explanatory statement does not explicitly detail the penalties for non-compliance, it is reasonable to infer that breaches could potentially lead to civil or criminal consequences, depending on the nature and severity of the violation. Given the structure of Australian legislation, penalties for non-compliance with customs regulations can range from fines to imprisonment, depending on the specific breach and the discretion of the court. The maximum penalties would be determined based on the particular circumstances of the offence, as outlined in the broader legal framework governing customs duties and tariff concessions.
The TCO itself, once issued, does not retroactively affect the rights of any person other than the Commonwealth. It explicitly states that it will not impose any liabilities on any person in respect of anything done or omitted before the date of registration. This provision protects individuals and entities from any disadvantage that might arise from the retrospective application of the TCO. For importers, the TCO has a beneficial effect, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations. This ensures that importers can reclaim any duties paid under the previous tariff rate, thereby mitigating any financial impact resulting from the tariff change.