EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508243
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.
Australasian Agricultural Services Pty Ltd applied for a TCO in respect of certain Egg Production Houses on 24 June 2005.
Instrument
TCO No 0508243 was made on 9 September 2005. It declares that those certain Egg Production Houses 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. 0508243 is taken to have come into force on 24 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 Tariff Concession Instrument No. 0508243, enacted in 2005, is a part of the Customs Act 1901, which governs the importation of goods into Australia. This instrument was introduced to provide tariff concessions on certain goods, in this case, Egg Production Houses, by reducing the customs duty applied to them. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) which apply a lower rate of customs duty on specified goods if certain conditions are met. In this instance, the CEO was satisfied that the Egg Production Houses applied for did not have substitutable goods produced in Australia, thereby meeting the core criteria for a tariff concession. The instrument was published in the Gazette, inviting submissions, but none were received. The TCO came into force on the date the application was lodged, 24 June 2005, and it benefits importers by allowing them to apply for a refund of duty for goods imported since that date, without imposing any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0508243 under the Customs Act 1901 applies specifically to the application for tariff concessions concerning certain Egg Production Houses lodged by Australasian Agricultural Services Pty Ltd on 24 June 2005. This instrument is intended for goods that are subject to a lower rate of customs duty as declared by the Chief Executive Officer of Customs (CEO) when the core criteria specified in section 269C of the Act are met, which in this case involved verifying that no substitutable goods were produced in Australia at the time of the application. The instrument declares that the specified Egg Production Houses fall under item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced duty rate from the general rate of 5% to 0%. The instrument's scope is limited to the particular goods and application in question and does not extend to other goods or applications unless similarly qualified and approved by the CEO.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include section 269F, which outlines the application process for a TCO (section 269F); section 269C, which sets out the core criteria that must be met for an application to be considered; and section 269P, which mandates the creation of a TCO when these criteria are satisfied (section 269P(3)). Section 269SJ specifies the types of goods that cannot be subject to a TCO, and section 269K(1) requires the Chief Executive Officer (CEO) of Customs to publish a notice in the Gazette inviting submissions if a TCO application is deemed valid. The Tariff Concession Instrument No. 0508243, which was made on 9 September 2005, applies these provisions to certain Egg Production Houses, reducing the duty rate from the general rate of 5% to 0% (section 269P(3)).
The obligations imposed by the Act on parties and entities governed by it are primarily on the CEO of Customs. When an application for a TCO is submitted, the CEO must first verify that the application does not pertain to goods excluded under section 269SJ. If the CEO determines that the application does not involve these excluded goods, they must then assess whether the core criteria set out in section 269C are met. If the application meets these criteria, the CEO is required to make a written TCO order, declaring that the specified goods are subject to a prescribed rate of duty in the Customs Tariff Act 1995 (section 269P(3)). Furthermore, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application, inviting any interested parties to submit objections or reasons why the TCO should not be made (section 269K(1)).
Any failure to comply with the requirements of the Customs Act 1901 can result in legal consequences. While the explanatory statement does not detail specific offences under this Act, general penalties for breaches of the Customs Act could include fines and imprisonment. The severity of the penalties would depend on the nature and extent of the breach, with maximum penalties potentially reaching up to five times the value of the goods or other specified fines and imprisonment terms as outlined in other sections of the Customs Act. The explanatory statement does not provide specific maximum penalties for breaches in this context, but it is clear that non-compliance with the Act's requirements can lead to significant legal ramifications.