EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0845442
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 processing overhead conveyors on 30 December 2008.
Instrument
TCO No 0845442 was made on 27 March 2009. It declares that those certain poultry processing overhead conveyors 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. 0845442 is taken to have come into force on 30 December 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 scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO), reducing the customs duty on certain goods. This was enacted to facilitate more competitive pricing and access to goods by reducing the cost of importation for specific items not produced domestically, thereby encouraging trade and economic efficiency. The Tariff Concession Instrument No. 0845442 was made in 2009 to address the specific needs of Inghams Enterprises Pty Ltd, which applied for tariff concessions on poultry processing overhead conveyors. This instrument came into effect on 30 December 2008, the date the application was lodged, and provides that these specific conveyors are subject to a duty rate of free, down from the general rate of 5%, as no substitutable goods were produced in Australia at the time of application. The policy objective here is to support the importation of goods that are not domestically produced, thereby benefiting importers by reducing their duty liabilities and potentially lowering consumer prices.
Scope and Application
The Tariff Concession Instrument No. 0845442 under the Customs Act 1901 applies to the certain poultry processing overhead conveyors for which Inghams Enterprises Pty Ltd lodged an application for a Tariff Concession Order (TCO) on 30 December 2008. The Act permits the Chief Executive Officer of Customs to grant TCOs that provide for lower rates of customs duty on goods that are not produced in Australia in the ordinary course of business. The CEO must satisfy specific core criteria, including the absence of substitutable goods in Australia, before making a TCO. The TCO applies to the specific goods mentioned in the instrument, which in this case are the poultry processing overhead conveyors. The Act's application is national in scope, operating under the Commonwealth jurisdiction. The TCO provides exemptions from the general rate of duty of 5%, applying a free rate of duty instead, effective from the date the application was lodged, 30 December 2008. The instrument does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person. The rights of importers are beneficially affected as they can apply for a refund of duty on goods imported since the effective date of the TCO. The CEO is required to publish a notice in the Gazette inviting submissions regarding the TCO application, although in this instance, no submissions were received.
Key Provisions
The Tariff Concession Instrument No. 0845442 is an instrument made under the Customs Act 1901 (the Act) that grants a tariff concession for certain poultry processing overhead conveyors. Section 269F of the Act allows for the application for a Tariff Concession Order (TCO) by a person, and if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, a TCO can be made (section 269P(3)). For the purposes of section 269C, the core criteria are met if no substitutable goods were produced in Australia on the day the application was lodged. This means that if the CEO is satisfied that no goods produced in Australia could be used as a substitute for the goods in question, a TCO can be made (section 269B, 269C, 269D, 269E). In this case, the CEO was satisfied that no substitutable goods were produced in Australia, and a TCO was made on 27 March 2009 (section 269P(3)).
The obligations and requirements imposed by the Act on the parties governed by it include the requirement for the CEO to publish a notice in the Gazette once a TCO application is accepted as valid (subsection 269K(1)). This notice includes an invitation for any person who believes that there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, the CEO did not receive any submissions in response to the notice (subsection 269K(1)). Additionally, section 269S(1) provides that a TCO is taken to have come into force on the day on which the application for the TCO was lodged. Therefore, TCO No. 0845442 is taken to have come into force on 30 December 2008, the day on which the application was lodged.
The Customs Act 1901 does not impose any offences or penalties for breach of its provisions. However, the Customs Tariff Act 1995 (the Tariff) does impose penalties for breaches of its provisions. For example, section 111 of the Tariff provides that a person who contravenes a provision of the Tariff is liable to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both. However, it is not clear from the text whether any such penalties apply to breaches of the TCO itself, or only to breaches of the Tariff.
In summary, the Tariff Concession Instrument No. 0845442 made under the Customs Act 1901 grants a tariff concession for certain poultry processing overhead conveyors. The CEO of Customs must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged in order to make a TCO. The CEO is also required to publish a notice in the Gazette once a TCO application is accepted as valid, and to take into account any submissions received in response to the notice. The TCO does not impose any liabilities on any person, and the rights of importers will be beneficially affected. The Customs Tariff Act 1995 imposes penalties for breaches of its provisions, but it is not clear from the text whether any such penalties apply to breaches of the TCO itself.