EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618151
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 poultry carcass in-line chillers on 03 November 2006.
Instrument
TCO No 0618151 was made on 19 January 2007. It declares that those certain poultry carcass in-line chillers 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. 0618151 is taken to have come into force on 03 November 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 Parliament of Australia, established a framework for the imposition of customs duties on imported goods. Among its provisions, Part XVA specifically allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can reduce the duty on certain goods, provided the application meets specific criteria such as the absence of substitutable goods produced in Australia. The problem this legislation aimed to address was the potential economic disadvantage faced by businesses that relied on importing specific goods where no local substitute was available, thereby facilitating fair trade practices and supporting industry growth.
In response to an application by Baiada Poultry Pty Ltd for tariff concessions on poultry carcass in-line chillers, Tariff Concession Order No. 0618151 was issued on 19 January 2007. The instrument, which came into effect on the date of the application (3 November 2006), reduced the duty on these chillers from the general rate of 5% to free, recognising the lack of substitutable goods produced in Australia. The order was made following a lack of submissions against it after a Gazette notice invited public feedback. This legislative action supports the policy objective of promoting competitive and efficient industries by alleviating the financial burden on importers of these specific goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to grant lower rates of customs duty on goods. This Act applies to any person or entity that seeks a tariff concession for goods imported into Australia, provided those goods do not fall under the categories specified in section 269SJ of the Act, which are ineligible for tariff concessions. The Act’s jurisdiction extends across Australia, as it is a Commonwealth Act. The scope of the Act includes the application process for tariff concessions, the criteria for determining eligibility, and the mechanisms for publishing and implementing the TCOs. The Act allows for the extension of its application through subordinate instruments, such as regulations and Gazette notices, which further detail the process and criteria for issuing TCOs. Any exclusions or exemptions are clearly outlined in the Act itself, ensuring that only specific goods not produced in Australia in the ordinary course of business are eligible for tariff concessions.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0618151 under the Customs Act 1901 (the Act) include the creation of a Tariff Concession Order (TCO) for certain poultry carcass in-line chillers. According to section 269F, a person can apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must issue a written order. This TCO, as per section 269P(3), specifies that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. For the chillers in question, this means they are subject to item 50 with a rate of duty that is free, as opposed to the general rate of 5% (section 269P(3)).
The Act imposes several obligations on the parties involved. Firstly, the CEO must ensure that any TCO application complies with the criteria set forth in the Act, particularly that no substitutable goods were produced in Australia. If the CEO finds that the application meets the criteria, they must promptly issue a TCO as specified in section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons to the CEO. This ensures transparency and allows for public consultation. In this instance, no submissions were received, indicating broad acceptance or lack of opposition to the TCO.
Failing to adhere to the requirements of the Customs Act 1901 can lead to various consequences. While the Act does not explicitly state specific offences or penalties for non-compliance with TCOs, breaches of other sections of the Act can result in penalties. For example, under section 126(1)(r) of the Regulations, any person who contravenes the provisions of the Customs Act or the regulations may be liable to penalties, including fines. The maximum penalties for breaches can vary significantly depending on the nature and severity of the offence, but they can include substantial fines and potential criminal charges for serious violations. The TCO itself does not impose any liabilities on any person, ensuring that the rights of individuals and entities are not adversely affected by its implementation.