EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411069
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.
Inghams Enterprises Pty Ltd applied for a TCO in respect of certain poultry defeatherer washers on 25 October 2004.
Instrument
TCO No 0411069 was made on 4 January 2005. It declares that those certain poultry defeatherer washers 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 3%.
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.0411069 is taken to have come into force on 25 October 2004.
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 amended to facilitate the introduction of Tariff Concession Orders (TCOs) through the Tariff Concession Instrument No. 0411069 enacted in 2005. This legislation addresses the problem of ensuring that Australian industries can access imported goods at a reduced customs duty rate when no suitable domestic alternatives exist, thereby encouraging efficiency and economic growth. The instrument was developed to provide a mechanism for the Chief Executive Officer of Customs to grant tariff concessions, thereby allowing for lower duty rates on specific goods where they are not produced domestically. This was enacted by the Parliament of Australia with the policy objective of fostering a competitive marketplace and supporting industries reliant on imported goods.
The instrument outlines the process for applying for a tariff concession, detailing the criteria that must be met, such as the absence of substitutable goods produced in Australia. In this specific instance, Inghams Enterprises Pty Ltd successfully applied for a tariff concession on certain poultry defeatherer washers, resulting in a reduced customs duty rate from 5% to 3%. The instrument ensures that the rights of importers are protected and that the concession does not disadvantage any party by retroactively applying from the date of the application, in line with the objectives of the Customs Act 1901.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks to import goods into Australia and qualifies for a tariff concession. The scope of the Act extends to all industries and types of goods that meet the criteria for a TCO, which primarily involves ensuring that the goods in question are not produced in Australia and have no suitable substitutes available domestically. The geographic reach of the Act is national, applying across all states and territories of Australia. Importantly, the Act excludes goods specified in section 269SJ, which cannot be subject to a TCO. The application process for a TCO involves meeting core criteria, such as the absence of substitutable goods produced in Australia, and the process can be further refined through subordinate instruments. For instance, the Explanatory Statement refers to Tariff Concession Instrument No. 0411069, which was made concerning certain poultry defeatherer washers, illustrating how the Act's provisions are implemented in specific cases. The commencement of a TCO is effective from the date the application is lodged, and it does not retroactively affect the rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this instrument are sections 269C, 269P, and 269S of the Customs Act 1901, which outline the criteria for and process of making a Tariff Concession Order (TCO) (269C, 269P, 269S). Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a written order, declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (269P). This TCO, in turn, declares that the goods are subject to a prescribed rate of duty, as outlined in the Tariff (269S). In this case, Inghams Enterprises Pty Ltd's application for a TCO in respect of certain poultry defeatherer washers was accepted, and the CEO declared these goods subject to a reduced rate of duty under item 50 of Schedule 4 to the Tariff (269S).
The Customs Act imposes specific obligations on the CEO in relation to TCOs. The CEO must assess whether an application meets the core criteria, which involves determining whether substitutable goods were produced in Australia on the day the application was lodged (269C). If the application meets these criteria, the CEO must make a written TCO (269P). The CEO must also publish a notice in the Gazette, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission (269K). In this case, the CEO was satisfied that the application met the core criteria, and no submissions were received in response to the Gazette notice (269K).
There are no specific offences or penalties outlined in the Customs Act for breaches related to TCOs. However, the Act does provide for general offences and penalties under other sections. For example, section 126 of the Customs Act provides for offences and penalties related to the importation of goods, including the imposition of a fine of up to 10,000 penalty units or imprisonment for up to five years, or both, for serious offences. The Regulations also provide for penalties for non-compliance with the Customs Act and related legislation, including fines and imprisonment (126). It is important to note, however, that the TCO itself does not impose any liabilities on any person, other than the Commonwealth (269S).