EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617296
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 weighing and packaging lines on 18 September 2006.
Instrument
TCO No 0617296 was made on 8 December 2006. It declares that those certain weighing and packaging lines 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. 0617296 is taken to have come into force on 18 September 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 was enacted by the Australian Parliament and is designed to manage the importation of goods into Australia. One of the mechanisms under this Act is the provision of Tariff Concession Orders (TCOs), which can reduce the customs duty payable on certain goods. This instrument is introduced to address the problem of high customs duties on goods that cannot be produced domestically, thus encouraging trade and investment by making imported goods more competitive. The Tariff Concession Instrument No. 0617296, made on 8 December 2006, is an example of such an order, which grants a tariff concession on specific weighing and packaging lines by reducing the duty rate from 5% to 0%. The policy objective is to facilitate the importation of goods that are not produced domestically, thereby supporting economic activities that rely on imported equipment and materials.
Scope and Application
The Tariff Concession Instrument No. 0617296 under the Customs Act 1901 applies to the specific weighing and packaging lines for which Inghams Enterprises Pty Ltd applied for tariff concessions. The Act allows for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for goods, effectively reducing the customs duty on those goods if certain conditions are met, such as the absence of substitutable goods produced in Australia. The application process involves meeting core criteria outlined in the Act, including ensuring that no substitutable goods are produced domestically, and involves a review process that includes public consultation. The TCO in question was made effective from the date the application was lodged, 18 September 2006, and it specifically exempts the goods in question from the general 5% customs duty rate, instead applying a 0% rate. This legislative instrument operates within the Commonwealth jurisdiction and does not impose any liabilities or disadvantage existing rights of any person other than the Commonwealth.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0617296 under the Customs Act 1901 include sections 269C, 269B, 269D, 269E, 269P, and 269S. These sections lay the groundwork for the creation and application of Tariff Concession Orders (TCOs). Specifically, section 269C stipulates the core criteria for approving a TCO application, which requires that no substitutable goods are being produced in Australia. Section 269B further clarifies the definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." If the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, they must issue a written order (section 269P(3)) that declares the goods to which the TCO applies, in this case, the weighing and packaging lines. The TCO instrument itself, 0617296, specifies that these lines are subject to a 0% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the general rate from 5%.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must ensure that the TCO application meets the core criteria as outlined in section 269C. This involves verifying that no substitutable goods are being produced in Australia. If the CEO determines that the application meets these criteria, they are required to publish a notice in the Gazette, inviting any interested parties to submit objections (subsection 269K(1)). This notice was published for TCO No. 0617296, but no objections were received. Additionally, the Act requires that TCOs be considered effective from the date the application was lodged, which for this TCO was 18 September 2006 (subsection 269S(1)). This means that any importer who imported the specified goods after this date can benefit from the reduced duty rate.
Breaching the conditions set forth in the Customs Act 1901 can result in significant consequences. While the specific offences and penalties for breaching a TCO are not detailed in the explanatory statement, the general framework of the Act provides for both civil and criminal penalties. For instance, under section 160 of the Customs Act, any person who knowingly makes a false or misleading statement in a TCO application can face a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both. Similarly, any misuse of a TCO could lead to financial penalties and criminal charges. The Act also allows for the imposition of civil penalties for non-compliance, which can include fines and other sanctions as deemed appropriate by the court.