EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510012
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.
Ingham Enterprises Pty Ltd applied for a TCO in respect of certain poultry processors on 02 August 2005.
Instrument
TCO No 0510012 was made on 07 October 2005. It declares that those certain poultry processors 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. 0510012 is taken to have come into force on 02 August 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, including the imposition and collection of customs duties. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act was to address the need for providing tariff concessions on specific goods where no substitutable goods are produced in Australia. The 2005 explanatory statement for Tariff Concession Instrument No. 0510012 specifies that Ingham Enterprises Pty Ltd applied for a TCO for certain poultry processors on 02 August 2005, and following satisfaction of the core criteria by the Chief Executive Officer of Customs, the instrument was issued on 07 October 2005. The instrument declared that these poultry processors are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, down from the general rate of 5%. The instrument aims to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the TCO, 02 August 2005, without imposing any new liabilities.
Scope and Application
The Customs Act 1901 applies to any person, entity, or industry involved in the importation of goods into Australia, including the imposition of customs duty on these goods. Specifically, Part XVA of the Act outlines the procedures for making Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on certain goods. The Act applies to the Commonwealth and extends across all states and territories of Australia. The application for a TCO can be made by any person, but the Chief Executive Officer of Customs (CEO) has discretion in deciding whether to grant such an order, particularly considering if the goods are substitutable by Australian-produced goods. Any application for a TCO must meet core criteria, such as the absence of substitutable goods produced in Australia at the time of the application. The CEO has the authority to make a TCO if these criteria are satisfied, effectively altering the customs duty applicable to the specified goods. The instrument can also be extended or restricted through subordinate instruments, although specific details on this are not provided in the explanatory statement.
Key Provisions
The Customs Act 1901 (the Act) facilitates the implementation of Tariff Concession Orders (TCOs) as outlined in Part XVA, with section 269F (1) allowing for applications to be made by individuals to the Chief Executive Officer of Customs (the CEO) for a TCO on specified goods. If the CEO is satisfied that the application pertains to goods not listed in section 269SJ, which are ineligible for a TCO, they must then assess whether the application meets the core criteria specified in section 269C. A TCO application is deemed to meet these criteria if, on the date the application was submitted, no substitutable goods were being produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F. Should the CEO find that the application satisfies these conditions, they are mandated by subsection 269P(3) to issue a written TCO, specifying the goods to which a particular tariff item applies as detailed in Schedule 4 of the Customs Tariff Act 1995 (the Tariff).
The Act imposes certain obligations on both the applicants and the CEO. For applicants, the primary obligation is to ensure that their application is made in good faith and includes all necessary details and supporting evidence that the goods for which a TCO is sought do not have substitutable Australian-made equivalents. The CEO, on the other hand, is obligated to assess the application against the criteria set out in the Act, publish a notice in the Gazette inviting submissions from interested parties, and consider any submissions received before making a decision. The CEO must also ensure that the rights of third parties are not adversely affected by the TCO, as stipulated by subsection 269S(1).
In terms of legal consequences, breaches of the conditions under which a TCO is granted could result in various penalties. If a TCO is obtained fraudulently or through misrepresentation, this could potentially lead to criminal charges under the Customs Act, with severe penalties including fines and imprisonment, as outlined in sections 238 to 242 of the Act. Additionally, civil penalties could apply for incorrect or misleading statements made in the application for a TCO, with fines up to $22,200 for individuals and $111,000 for corporations, as provided by section 279 of the Act. The Act does not specify a maximum penalty for each offence but indicates that the penalties are substantial and intended to deter fraudulent or misleading conduct in the application process.