EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516754
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 in-line weighers on 6 December 2005.
Instrument
TCO No 0516754 was made on 03 March 2006. It declares that those certain in-line weighers 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. 0516754 is taken to have come into force on 6 December 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. 0516754, made under the Customs Act 1901, addresses the issue of tariff concessions for specific goods by reducing the customs duty for in-line weighers, as applied to Inghams Enterprises Pty Ltd. Enacted in 2006, this legislation allows the Chief Executive Officer of Customs to implement tariff concessions if certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument was introduced to provide a lower rate of customs duty on these goods, which is particularly beneficial for importers who can apply for refunds of duty paid prior to the instrument's effective date. The policy objective is to facilitate trade by reducing the financial burden on importers of these specific goods.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application of tariff concession orders (TCO) for specific goods, thus enabling the Chief Executive Officer of Customs to apply lower rates of customs duty. This legislative provision allows entities or individuals to apply for a TCO if the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from eligibility. The Act mandates that a TCO application must meet core criteria, specifically that no substitutable goods are produced in Australia at the time of application, as outlined in sections 269C, 269D, and 269E. Once the application is deemed to meet these criteria, the CEO issues a written order that effectively subjects the specified goods to a prescribed tariff item from the Customs Tariff Act 1995, with the example provided showing a reduction from a 5% general duty rate to a free rate for certain in-line weighers. This Act applies nationally across Australia and its implementation can be further refined through subordinate instruments, ensuring the flexibility and specificity required for various industry applications.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for the implementation of Tariff Concession Orders (TCOs) through Part XVA, as detailed in section 269F. This provision allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. The Act specifies that a TCO results in a lower rate of customs duty for the goods it covers. To be approved, the TCO application must meet core criteria, outlined in sections 269C and 269P, which require that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged.
The CEO is obligated to consider the application and decide if it meets the core criteria, as stipulated in section 269C. If the application is found to meet these criteria, the CEO must issue a written order, as required by section 269P(3), specifying the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as per subsection 269K(1). In the case of TCO No 0516754, which was applied for by Inghams Enterprises Pty Ltd for certain in-line weighers, the CEO received no submissions against the order.
Should a TCO be granted, the person or entity subject to the Act must comply with the terms of the order. This includes ensuring that the goods specified in the TCO are imported or produced in a manner consistent with the concessions granted. Importers of goods affected by a TCO may apply for a refund of duty paid on those goods from the date the TCO is deemed to have come into force, as stated in paragraph 126(1)(r) of the Regulations. Importantly, a TCO does not affect the rights of any person other than the Commonwealth in a way that would disadvantage them or impose liabilities in respect of actions taken before the date of registration.
Breaching the terms of a TCO or failing to comply with the requirements of the Customs Act 1901 may result in various consequences. Under the Act, an individual or entity found to be in breach may face penalties, which could include fines or imprisonment, depending on the nature and severity of the breach. The maximum penalties are not specified in the explanatory statement but generally, the severity of the penalty would be commensurate with the gravity of the offence under the applicable laws. Civil consequences might include the imposition of additional duties or interest on unpaid duties. It is crucial for parties subject to the Act to ensure full compliance with its provisions to avoid these consequences.