EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507660
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 Hatchery Line Ventilators on 22 June 2005.
Instrument
TCO No 0507660 was made on 2 September 2005. It declares that those certain Hatchery Line Ventilators 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 0%.
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. 0507660 is taken to have come into force on 22 June 2005.
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 under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The 2005 Instrument, TCO No. 0507660, was introduced to address a specific need by providing tariff concessions on certain Hatchery Line Ventilators, which resulted in a reduction of the customs duty from 5% to 0%. The policy objective of the Act, as outlined, is to facilitate the import of goods that do not have a substitutable equivalent produced in Australia, thereby supporting industries that rely on imported goods for their operations. This instrument came into force on the date the application was lodged, 22 June 2005, and does not disadvantage any person other than the Commonwealth by imposing liabilities for actions taken prior to the date of registration.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, particularly those seeking tariff concessions. Under Part XVA of the Act, the Chief Executive Officer of Customs is empowered to make Tariff Concession Orders (TCOs) which provide for reduced rates of customs duty on specified goods, subject to certain criteria being met. The Act specifically excludes certain goods from being subject to a TCO, as outlined in section 269SJ. A TCO application must meet core criteria, which are detailed in sections 269B, 269C, 269D and 269E, and if these criteria are satisfied, the CEO must issue a TCO. The geographic reach of the Act is national, with the TCOs applying across Australia. Any person may challenge the making of a TCO, but in the case of TCO No. 0507660, no objections were received. The TCO itself does not affect any existing rights or impose any new liabilities, and in fact, provides benefits to importers who can apply for duty refunds on goods imported since the effective date of the TCO. The application and scope of the Act may be further defined through subordinate instruments, which can provide additional details or clarifications on the process and conditions for TCOs.
Key Provisions
The main operative sections of the Customs Act 1901, as evidenced by the Tariff Concession Instrument No. 0507660, provide a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) (ss 269C, 269F, 269P). These sections enable a reduction or exemption from customs duty on specified goods when certain criteria are met. For instance, section 269C sets out the core criteria that an application must meet, primarily that no substitutable goods are produced in Australia at the time of application. Section 269F allows for an application to be made by any person, and section 269P mandates that if the CEO determines an application meets the core criteria, a TCO must be issued.
The Act imposes several obligations on the parties involved. The CEO must ensure that any application for a TCO is considered against the criteria set out in section 269C. This involves verifying that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). The CEO must also consider any submissions received and make a decision based on the merits of the application and the evidence provided.
Failure to comply with the provisions of the Customs Act 1901 can result in significant consequences. Although the Act does not explicitly outline offences or penalties for breaches of TCO provisions, breaches of the broader Customs Act could lead to criminal charges. For example, knowingly or recklessly making a false statement in an application could constitute an offence under section 230 of the Customs Act, which carries a maximum penalty of 2,500 penalty units or imprisonment for five years, or both, if prosecuted in a federal court. Similarly, contravening any provision of the Customs Act could result in civil penalties, including fines, as outlined in section 277. These penalties underscore the importance of adhering to the requirements and obligations set forth in the Act.