EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713865
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.
Vemag Australia Pty Ltd applied for a TCO in respect of certain meat fish and poultry injectors on 30 August 2007.
Instrument
TCO No 0713865 was made on 09 November 2007. It declares that those certain meat fish and poultry injectors 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. 0713865 is taken to have come into force on 30 August 2007.
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 managing customs duties, including the authority for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under section 269F. The Act was introduced to address the need for a structured process to grant concessions on customs duties for specific goods. Tariff Concession Instrument No. 0713865, made under this Act on 9 November 2007, applies a zero-rate duty on certain meat, fish, and poultry injectors as of 30 August 2007, the date the application was lodged, provided that no substitutable goods were produced in Australia. The policy objective behind this concession is to potentially benefit importers by reducing their duty liabilities, as they can apply for a refund of duties paid on these goods since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty on specified goods. This legislative framework is applicable to any person or entity that applies for a TCO in respect of goods not listed in section 269SJ, which details the types of goods that are ineligible for tariff concessions. The application process requires that no substitutable goods, defined as those produced in Australia for a similar use, are being produced domestically at the time of application. If the CEO determines that the application meets the core criteria, they must issue a TCO, as occurred with Vemag Australia Pty Ltd’s application for certain meat fish and poultry injectors, leading to Instrument TCO No 0713865 which was made on 9 November 2007. This TCO exempts these injectors from the general duty rate of 5%, applying instead a duty rate of free. The legislation mandates that the CEO must invite submissions from the public regarding the TCO application, although in this case, none were received. The TCO’s commencement date aligns with the date the application was lodged, 30 August 2007, ensuring no retroactive disadvantages or liabilities are imposed on non-Commonwealth entities.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0713865 under the Customs Act 1901 (section 269F) establish the process by which a Tariff Concession Order (TCO) can be applied for and subsequently granted by the Chief Executive Officer (CEO) of Customs. Section 269C outlines the criteria that must be met for a TCO application to be considered, primarily ensuring that no substitutable goods are produced in Australia on the date the application is lodged (section 269P(3)). If these criteria are satisfied, the CEO is mandated to issue a written TCO that specifies the goods and the applicable tariff concession (section 269P(3)). In this particular case, Instrument TCO No. 0713865 was issued on 9 November 2007, applying a zero duty rate to certain meat fish and poultry injectors, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from 30 August 2007.
The Act imposes specific obligations on the parties involved. The applicant, such as Vemag Australia Pty Ltd, must ensure that their application for a TCO is valid and meets the stipulated criteria. The CEO of Customs is obligated to assess the application, consult with relevant stakeholders if necessary, and make a decision based on the information provided. In this case, no submissions opposing the TCO were received, as indicated by the CEO's notice in the Gazette (subsection 269K(1)). The CEO's role also includes ensuring that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date (subsection 269S(1)). Additionally, importers of the affected goods may apply for a refund of duty paid on imports made since the TCO's effective date (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. While the specific legislation does not detail offences or penalties within the explanatory statement, breaches of customs regulations generally attract civil or criminal penalties under other sections of the Act. For instance, providing false information in an application could result in fines or imprisonment. The maximum penalties for customs-related offences can vary, with some carrying fines of up to $22,200 for individuals and significantly higher amounts for corporations, along with potential imprisonment terms. These provisions ensure that the integrity of the customs duty system is maintained and that parties adhere to the legislative framework governing tariff concessions.