EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511022
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.
Baiada Poultry Pty Ltd applied for a TCO in respect of certain Live Bird Handlers on 18 August 2005.
Instrument
TCO No 0511022 was made on 28 October 2005. It declares that those certain Live Bird Handlers 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. 0511022 is taken to have come into force on 18 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, enacted by the Australian Parliament, facilitates the application of lower rates of customs duty on specified goods through Tariff Concession Orders (TCOs). This legislative framework addresses the gap in tariff regulation by providing a mechanism for concessional rates when certain criteria are met. Specifically, the Act allows the Chief Executive Officer of Customs to reduce the duty on goods if no substitutable goods are produced in Australia, ensuring competitive and fair trade practices. The Explanatory Statement for Tariff Concession Instrument No. 0511022, issued on 28 October 2005, highlights the process of applying for and granting such concessions, with the primary objective being to support the economic viability of businesses by reducing import costs.
Scope and Application
The Tariff Concession Order No. 0511022 under the Customs Act 1901 applies to the goods known as Live Bird Handlers, specifically those submitted by Baiada Poultry Pty Ltd on 18 August 2005. This legislation is part of the broader scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to reduce the rate of customs duty on certain goods. The CEO determined that a TCO was appropriate for these goods as no substitutable goods were being produced in Australia at the time of the application, meeting the core criteria set out in the Act. The application of this TCO is geographically and jurisdictionally within the Commonwealth of Australia, as it pertains to the national customs duties and tariffs outlined in the Customs Act 1901 and the Customs Tariff Act 1995. The order effectively reduces the duty on Live Bird Handlers from the general rate of 5% to 0%. This concession does not affect any existing rights or liabilities of parties other than the Commonwealth and does not impose any new liabilities. Importers of these goods will have the right to apply for a refund of duty paid on goods imported since the TCO was taken to have come into force on 18 August 2005.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0511022 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application meets the core criteria, which involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business (section 269C), they must then make a written order (section 269P(3)) that specifies the lower rate of duty for the goods in question. For instance, in this case, the CEO determined that certain Live Bird Handlers are subject to a 0% duty rate, down from the general rate of 5% (section 269P(3)).
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess whether an application for a TCO meets the core criteria as outlined in section 269C. This involves confirming that no substitutable goods are produced in Australia. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this instance, no submissions were received in response to the notice.
In terms of consequences for non-compliance, the Act does not explicitly outline offences or penalties for breaches relating to the issuance or application of TCOs. However, the general framework of the Customs Act 1901 does provide for various penalties for breaches of customs laws, which could potentially include fines and imprisonment. The specifics of penalties would depend on the nature and severity of the breach, but they are not detailed within this particular TCO instrument. The TCO itself does not impose any liabilities on any person, and it does not affect the rights of individuals as at the date of registration, except to beneficially affect the rights of importers who may apply for a refund of duty on goods imported since the TCO came into force (section 126(1)(r) of the Regulations).