EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138951
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.
Rebain International applied for a TCO in respect of certain peptiser on 22 November 2011.
Instrument
TCO No 1138951 was made on 06 February 2012. It declares that those certain peptisers 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. 1138951 is taken to have come into force on 22 November 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties, among other things. A significant aspect of this Act is its provision for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duty on specific goods under certain conditions. The Act was amended to introduce this scheme, aiming to address the gap in providing tariff relief for goods that are not produced domestically and for which no substitutable goods are available in Australia. This initiative supports economic efficiency by facilitating the import of necessary goods that are not manufactured locally. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make these orders, provided the application meets the core criteria, ensuring a transparent and accountable process for tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 1138951, made under Part XVA of the Customs Act 1901, pertains to the application of tariff concessions on certain goods, specifically certain peptisers, and applies to the person or entity that has applied for the concession, namely Rebain International in this case. The instrument is enacted by the Chief Executive Officer of Customs and serves to reduce the customs duty on the specified goods from the general rate of 5% to free, provided the application meets the core criteria outlined in the Act. The instrument has a national jurisdictional reach as it is a Commonwealth enactment under Australian law. The application of this instrument is subject to certain exclusions, particularly in relation to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument also operates in accordance with the Customs Tariff Act 1995, with the concessions applying from the date the application was lodged, in this case, 22 November 2011. The Act allows for further specification and amendment of the application scope through subordinate instruments, although this particular instrument does not extend its application beyond its stated terms.
Key Provisions
The main operative sections of this Tariff Concession Order (TCO) include sections 269C, 269F, and 269P of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, which include the absence of substitutable goods produced in Australia as per section 269C, the CEO must make a written order declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This means that the goods in question will be subject to a lower rate of customs duty, or in this case, free duty. Section 269P(3) mandates the CEO to issue the written TCO order once the core criteria are met.
The obligations imposed by the Act on the parties or entities it governs include the requirement for Rebain International to apply for a TCO under section 269F. Upon receiving the application, the CEO must assess whether it meets the core criteria outlined in section 269C. This involves determining if substitutable goods were produced in Australia at the time the application was lodged. If the CEO is satisfied that the application meets these criteria, they must then issue a TCO as per section 269P(3). Additionally, the CEO is obligated to publish a notice in the Gazette under subsection 269K(1) inviting any interested parties to submit any reasons why the TCO should not be made. In this instance, no submissions were received.
Regarding offences, penalties, or consequences for breach, the Act does not explicitly detail penalties for failing to comply with the TCO provisions. However, the general principle under Australian law is that breaches of statutory requirements can lead to legal consequences. For customs-related offences, the Customs Act 1901 and the Crimes Act 1914 may apply, which could result in civil or criminal penalties. The maximum penalties can vary significantly depending on the severity of the breach, but they may include fines and, in severe cases, imprisonment. The Act ensures that the TCO does not affect the rights of a person as at the date of registration and does not impose any liabilities on any person, except the Commonwealth.