EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1116634
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.
Linco Food Systems Pty Ltd applied for a TCO in respect of certain poultry processing killing machine parts on 25 May 2011.
Instrument
TCO No 1116634 was made on 08 August 2011. It declares that those certain poultry processing killing machine parts 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. 1116634 is taken to have come into force on 25 May 2011.
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 Australian Parliament and includes provisions for the application of Tariff Concession Orders (TCOs) to reduce the rate of customs duty on certain goods. This legislation addresses the problem of high import duties on goods for which no Australian-made substitutes exist, potentially discouraging the import of essential components necessary for various industries. The Tariff Concession Instrument No. 1116634, introduced in 2011, applies specifically to certain poultry processing killing machine parts, providing a concession to lower the duty rate from 5% to free. The policy objective of this measure is to facilitate the importation of these specific parts, benefiting importers by potentially reducing their duty liabilities and encouraging the use of these components in the industry.
Scope and Application
The Tariff Concession Instrument No. 1116634 pertains to the Customs Act 1901 and specifically applies to the scheme where Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs. This legislation allows for a lower rate of customs duty on goods specified in a TCO, which is applicable to entities or individuals importing these goods into Australia. The scope of the Act extends to any entity or person engaged in importing goods that are subject to a TCO, aiming to provide relief in the form of reduced customs duties. The geographic reach of this legislation is national, applying across all states and territories of Australia, as it is an instrument of the Commonwealth. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which lists goods ineligible for TCOs. The application of the Act may also be extended or restricted through subordinate instruments, although the primary application is as outlined within the Customs Act 1901.
Key Provisions
The Tariff Concession Instrument No. 1116634, under the Customs Act 1901, outlines the specific provisions for the concession of customs duty on certain poultry processing killing machine parts. According to section 269F, a person can apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning these goods. If the application meets the core criteria, as defined in sections 269C and 269P, the CEO must grant the TCO, as detailed in section 269P(3). In this instance, the CEO was satisfied that no substitutable goods were produced in Australia, allowing for a TCO to be issued.
Section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made. The CEO must consider these submissions, although in this case, no submissions were received. The TCO, once granted, is effective from the date the application was lodged, as stated in section 269S(1). This means that for TCO No. 1116634, the effective date is 25 May 2011. Importantly, the TCO does not retroactively affect the rights of any person or impose new liabilities on them, protecting the interests of importers who may apply for duty refunds on goods imported since the effective date.
The obligations imposed by this TCO are primarily on the CEO, who must assess the application against the core criteria and make a decision accordingly. Additionally, importers benefit from the concession by potentially applying for duty refunds under paragraph 126(1)(r) of the Regulations. The concession does not impose any new liabilities on any person, ensuring that existing rights and obligations are preserved. Any breach of the terms of the TCO could lead to civil or criminal consequences, although specific penalties are not detailed in the explanatory statement.