EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603532
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 poultry tail cutters on 8 February 2006.
Instrument
TCO No 0603532 was made on 18 April 2006. It declares that those certain poultry tail cutters 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. 0603532 is taken to have come into force on 8 February 2006.
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, establishes a framework for the imposition of customs duties and the regulation of imports and exports. This Act includes provisions for Tariff Concession Orders (TCOs), which provide for reduced customs duty rates on certain goods under specific circumstances. The introduction of Tariff Concession Instrument No. 0603532 in 2006 addressed the need to provide tariff relief for certain imported goods, thereby facilitating trade and potentially reducing costs for businesses. This instrument was developed in response to an application by Inghams Enterprises Pty Ltd for tariff concessions on poultry tail cutters, where it was determined that no substitutable goods were produced in Australia. The policy objective behind such concessions is to support industries by reducing the cost of imported goods, thereby fostering economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0603532 under the Customs Act 1901 applies specifically to goods for which a Tariff Concession Order (TCO) has been sought and granted. The instrument was made in response to an application by Inghams Enterprises Pty Ltd for a TCO on certain poultry tail cutters, which was approved as it met the core criteria set out in the Act. This means that the TCO applies to the specific goods identified in the application, namely poultry tail cutters, and to the rates of customs duty specified in the TCO. The instrument is applicable nationally, as it pertains to the operation of the Customs Act 1901, which is a Commonwealth Act. The TCO does not apply to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument also ensures that the rights of persons other than the Commonwealth are not adversely affected by the concession, and that no new liabilities are imposed on anyone as a result of the TCO. The TCO came into force on the date the application was lodged, 8 February 2006, and provides for a reduced duty rate of 0% for the specified poultry tail cutters, down from the general rate of 5%.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0603532 under the Customs Act 1901 (section 269C) establish that a Tariff Concession Order (TCO) can be made by the Chief Executive Officer of Customs (section 269F) when the application for the concession meets certain core criteria. Specifically, if the CEO is satisfied that the application is for goods that do not have substitutable goods produced in Australia (section 269P(3)), a TCO can be issued, thereby applying a lower rate of customs duty to those goods (section 269P). In this case, Instrument TCO No. 0603532 declares that certain poultry tail cutters are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of 0% instead of the general rate of 5% (section 269P(3)).
The Act imposes obligations on various parties involved in the process of applying for and receiving a TCO. Firstly, applicants such as Inghams Enterprises Pty Ltd must ensure that their applications are valid and meet the core criteria as stipulated by the Act (section 269F). The CEO of Customs is obligated to evaluate the application against these criteria and decide whether to issue a TCO (section 269P). Additionally, upon accepting a valid application, the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections (section 269K(1)). The CEO is also responsible for ensuring that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on such persons in respect of actions taken before the TCO’s registration date (section 269S).
Any breach of the provisions set forth in the Customs Act 1901, including the issuance of a TCO, could potentially lead to civil or criminal consequences. However, the explanatory statement does not specify particular offences, penalties, or consequences for non-compliance with the TCO itself. It is essential to refer to the broader Customs Act 1901 and any relevant regulations for detailed information on penalties for non-compliance with customs laws, which can include fines and imprisonment for more severe infractions. For instance, under section 238 of the Customs Act, the maximum penalty for knowingly importing goods contrary to the Act can be a fine of up to 10,000 penalty units or imprisonment for up to 10 years, or both, depending on the severity of the offence.