EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719817
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.
Food Processing Equipment Pty Ltd applied for a TCO in respect of certain meat processing machine on 21 November 2007.
Instrument
TCO No 0719817 was made on 08 February 2008. It declares that those certain meat processing machine 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. 0719817 is taken to have come into force on 21 November 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, provides a framework for the administration of customs and excise duties in Australia. The Act was amended to include Part XVA, which allows for the creation of Tariff Concession Orders (TCOs) to provide tariff relief on specific goods. This mechanism was introduced to address the need for tariff reductions on goods where no suitable Australian-made alternatives exist, thereby encouraging the importation of certain goods that are not domestically produced. The explanatory statement for Tariff Concession Instrument No. 0719817, made under this Act, details a case where Food Processing Equipment Pty Ltd successfully applied for a TCO on certain meat processing machinery. The Chief Executive Officer of Customs granted this concession on 8 February 2008, effective from 21 November 2007, reducing the duty on these goods from 5% to free. The policy objective is to facilitate the import of goods that are not produced domestically, thereby supporting industries that rely on imported equipment and machinery.
Scope and Application
The Tariff Concession Instrument No. 0719817 applies to the import of certain meat processing machines and is a specific instance of the broader scheme established under Part XVA of the Customs Act 1901. This Act enables the Chief Executive Officer of Customs to create Tariff Concession Orders (TCOs) for goods that meet certain criteria, thereby granting them a lower rate of customs duty. The legislation applies to any person who submits an application for a TCO, as long as the goods in question are not specified as ineligible in section 269SJ of the Act. The instrument extends to the entire Commonwealth of Australia and operates under the authority granted by the Customs Act 1901 and the Customs Tariff Act 1995. It does not impose any new liabilities on individuals or entities, nor does it affect any pre-existing rights, ensuring that no person other than the Commonwealth is disadvantaged or subjected to new obligations arising from the application of this TCO. The scope of this particular TCO is limited to the specified meat processing machines and does not extend to other goods or industries unless explicitly addressed in a subsequent order or instrument.
Key Provisions
The Tariff Concession Order (TCO) No. 0719817, issued under section 269F of the Customs Act 1901, provides a concession on the customs duty applicable to certain meat processing machines. Section 269C specifies that the application for a TCO meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the Chief Executive Officer (CEO) of Customs is satisfied that the application is valid and meets these criteria, they must make a written order (section 269P(3)). This particular TCO, declared on 8 February 2008, specifies that certain meat processing machines are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate for these goods, which contrasts with the general rate of duty of 5%.
The obligations imposed by this TCO on the parties and entities it governs are primarily focused on ensuring compliance with the terms of the concession. Food Processing Equipment Pty Ltd, the applicant, must ensure that the meat processing machines they seek to import are accurately described and that they meet the criteria for the concession. The CEO of Customs has the obligation to verify that the application meets the specified criteria and to publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). In this case, no submissions were received, which may indicate general acceptance of the TCO.
Non-compliance with the provisions of the TCO or the Customs Act could lead to various consequences. Firstly, any party found to be misrepresenting the goods or failing to meet the criteria for the concession may face civil or criminal penalties. Although the explanatory statement does not explicitly detail these penalties, the Customs Act provides for both civil and criminal sanctions for breaches. Civil penalties may include fines, while criminal penalties could involve imprisonment, depending on the severity of the breach. Additionally, the TCO specifies that it does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date, which is 21 November 2007 (subsection 269S(1)). Importers, however, will benefit from being able to apply for a refund of duty on goods imported since this date under paragraph 126(1)(r) of the Regulations.