EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618511
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 Limited applied for a TCO in respect of certain poultry meat tempering rooms on 14 November 2006.
Instrument
TCO No 0618511 was made on 02 February 2007. It declares that those certain poultry meat tempering rooms 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. 0618511 is taken to have come into force on 14 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, including the imposition of customs duties. Part XVA of the Act provides for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This scheme was introduced to address the problem of providing tariff relief on specific goods where substitutable goods are not produced in Australia. The Tariff Concession Instrument No. 0618511, made on 02 February 2007, is an example of such an order. In this instance, Inghams Enterprises Pty Limited applied for a TCO in respect of certain poultry meat tempering rooms, which the CEO approved, resulting in a tariff concession from the general rate of 5% to a free rate. The policy objective here is to facilitate the import of goods where no suitable Australian alternatives exist, thereby potentially lowering costs for businesses and consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) that apply a lower rate of customs duty to specified goods. This Act applies to individuals or entities seeking tariff concessions for goods not produced in Australia and not specified in section 269SJ, which includes certain types of goods that are generally excluded from tariff concessions. The scope of the Act is national, operating within the Commonwealth jurisdiction, and it extends its reach through the issuance of TCOs. These orders can be made if the CEO is satisfied that no substitutable goods are produced in Australia, meaning that there are no locally produced alternatives that serve the same purpose as the imported goods. The Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on such persons. The application of the Act may be further defined or refined through subordinate instruments, which may provide additional criteria or processes for TCO applications.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0618511 (section 269P(3)) involve the creation of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO) for specific poultry meat tempering rooms, aligning them with item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). The TCO was made on 2 February 2007 and is effective from the date the application was lodged, 14 November 2006 (subsection 269S(1)). The CEO was satisfied that no substitutable goods were produced in Australia on the date of the application, thus meeting the core criteria set out in sections 269C and 269D of the Customs Act 1901. This satisfaction led to the declaration that the general rate of duty for these goods, which is 5%, would be reduced to free under the TCO.
In accordance with the Customs Act 1901, the obligations imposed on the parties governed by this TCO include the requirement for the CEO to make a written order if the application meets the core criteria. Specifically, under section 269P(3), the CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act and that no substitutable goods were produced in Australia on the application date. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must also consider any submissions received and decide whether the application meets the core criteria. In this instance, the CEO did not receive any submissions and proceeded to make the TCO.
Breaching the conditions set out in the Customs Act 1901 or the Tariff Concession Instrument No. 0618511 could result in civil or criminal consequences. For example, providing false information in the application process could lead to penalties under the Customs Act 1901, which may include fines or imprisonment. Section 269N of the Act provides that a person who contravenes a provision of the Act or the Regulations may be liable to a fine. The maximum penalty for a corporation under section 269N(1) is 10,000 penalty units, while for an individual, the maximum penalty is 1,000 penalty units (subsection 269N(2)). Additionally, if the breach involves serious criminal conduct, criminal prosecution could be pursued, leading to more severe penalties.