EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618403
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 gas poultry stunners on 09 November 2006.
Instrument
TCO No 0618403 was made on 19 January 2007. It declares that those certain gas poultry stunners 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. 0618403 is taken to have come into force on 09 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, establishes a framework for the regulation of customs and excise, including the ability to grant tariff concession orders (TCOs) to reduce customs duty on specific goods. This mechanism aims to address economic inefficiencies and promote competitiveness by ensuring that Australian businesses have access to essential goods at reduced rates, provided no suitable alternatives are produced domestically. The Tariff Concession Instrument No. 0618403, issued in 2007, exemplifies this process by granting a tariff concession to Baiada Poultry Pty Ltd for certain gas poultry stunners. This concession was made after it was determined that no substitutable goods were produced in Australia, aligning with the core criteria outlined in the Act. The policy objective is to facilitate the import of goods essential for business operations without imposing additional burdens or liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity that seeks to have a lower rate of customs duty applied to certain goods, provided these goods do not fall under the exclusions listed in section 269SJ. A TCO application must meet the core criteria set out in section 269C, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The CEO is mandated to issue a written order, the TCO, if the application meets these criteria. The instrument’s application is effective from the date the application was lodged, as per subsection 269S(1) of the Act. The scope of this legislation extends nationally, with the CEO having the authority to grant these concessions across Australia. The issuance of a TCO does not affect the rights of any person adversely in respect of actions taken before the registration date, and it does not impose any liabilities on individuals or entities. This legislative instrument allows for the amendment and expansion of its application through subordinate instruments, thereby providing flexibility in managing tariff concessions.
Key Provisions
The Customs Act 1901 allows the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs), which apply lower rates of customs duty on certain goods. Under section 269F, a person can apply for a TCO for goods that are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. For a TCO to be issued, the CEO must be satisfied that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C. If these conditions are met, the CEO must issue a written order (TCO) as per section 269P(3), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their application is for goods not specified in section 269SJ and that they meet the core criteria. The CEO, on the other hand, is required to review the application, assess whether it meets the core criteria, and, if satisfied, publish a notice in the Gazette inviting submissions from any interested parties. If no submissions are received, the CEO must proceed to make the TCO. In this case, the CEO accepted the application from Baiada Poultry Pty Ltd for gas poultry stunners on 9 November 2006 and issued TCO No. 0618403 on 19 January 2007, declaring that the goods are subject to a 5% duty rate.
Under the Act, failure to comply with the provisions of a TCO or any other related obligations may lead to various civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act 1901 can generally result in penalties such as fines or imprisonment, depending on the severity of the breach. The maximum penalties for breaches of the Customs Act can be substantial, particularly for intentional or repeated offences. It is important for all parties to adhere to the requirements of the Act to avoid these potential consequences.