EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801294
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 Ltd applied for a TCO in respect of certain poultry defeatherer washer on 24 January 2008.
Instrument
TCO No 0801294 was made on 4 April 2008. It declares that those certain poultry defeatherer washers 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. 0801294 is taken to have come into force on 24 January 2008.
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, as amended, includes a mechanism through which the Chief Executive Officer of Customs can grant tariff concession orders (TCOs) to reduce the customs duty payable on certain imported goods. Enacted by the Parliament of Australia, this scheme was introduced to address the issue of applying a lower rate of customs duty to goods that do not have substitutable Australian-made alternatives. Tariff Concession Instrument No. 0801294, made on 4 April 2008, is an example of such an order which grants a tariff concession to certain poultry defeatherer washers, reducing their duty rate from 5% to free. This order was made after Inghams Enterprises Pty Ltd applied for the concession on 24 January 2008, and the CEO was satisfied that no substitutable goods were produced in Australia. The policy objective of this legislative instrument is to facilitate the import of goods that cannot be domestically produced, thereby benefiting importers by potentially lowering their costs and increasing the competitiveness of their products.
Scope and Application
The Tariff Concession Instrument No. 0801294, made under the Customs Act 1901, applies specifically to certain poultry defeatherer washers for which Inghams Enterprises Pty Ltd applied for tariff concessions. This instrument is part of the broader scheme outlined in Part XVA of the Customs Act, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) to apply lower rates of customs duty to specific goods. The application of this particular TCO is contingent on the CEO's determination that no substitutable goods were produced in Australia at the time the application was lodged. As such, the instrument directly impacts importers of the specified goods by allowing them to claim refunds of duty for goods imported since the TCO was taken to have come into force on 24 January 2008. The TCO applies on a Commonwealth level, as it is an instrument of the Customs Act, and does not impose any liabilities on any person other than the Commonwealth. Notably, the instrument does not disadvantage any person who had rights as at the date of registration nor does it impose liabilities for actions taken prior to the registration date.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0801294, as referenced under the Customs Act 1901, involve the procedures and requirements for the Chief Executive Officer (CEO) of Customs to consider and approve Tariff Concession Orders (TCOs) (sections 269C, 269F, and 269P). Section 269F allows an application to be made by a person for a TCO, and section 269C stipulates that the application meets core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Once the CEO is satisfied that the application meets these criteria, a TCO is made under section 269P(3). This specific TCO, No. 0801294, pertains to certain poultry defeatherer washers and declares them to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The Act imposes specific obligations on the CEO of Customs regarding the processing of TCO applications. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for TCOs. If the CEO determines that the application meets the core criteria, they must make a written TCO order. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, although in this case, no submissions were received. This TCO, once made, has retrospective effect from the date the application was lodged, as specified in section 269S(1).
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, any failure by the CEO to follow the prescribed procedures or to correctly determine that an application meets the core criteria could potentially lead to legal challenges or disputes. The rights of importers are protected under the Act to ensure they are not disadvantaged by the TCO, and they may apply for a refund of duty on goods imported since the TCO was taken to have come into force under paragraph 126(1)(r) of the Regulations. No liabilities are imposed on any person by this TCO, safeguarding against any disadvantage to those who may have imported goods before the TCO was registered.