EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117267
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 disc picker machine parts on 31 May 2011.
Instrument
TCO No 1117267 was made on 22 August 2011. It declares that those certain poultry processing disc picker 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. 1117267 is taken to have come into force on 31 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 Tariff Concession Instrument No. 1117267 was enacted under the Customs Act 1901 to provide a tariff concession for certain poultry processing disc picker machine parts. This instrument was introduced to address the problem of ensuring that Australian businesses have access to competitively priced goods by granting a tariff concession when no substitutable goods are produced in Australia. The instrument was created by the Chief Executive Officer of Customs, as permitted under section 269F of the Act, following an application by Linco Food Systems Pty Ltd on 31 May 2011. The instrument came into force on the same date and aims to lower the duty rate from the general 5% to free, benefitting importers who can apply for a refund of duty on goods imported since the date the concession is deemed to have commenced. No submissions opposing the concession were received, and the instrument does not affect any rights or impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity that applies for a TCO for goods which, upon meeting certain criteria, can benefit from a reduced or waived customs duty. The core criteria, as outlined in the Act, require that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is made. This provision ensures that Australian industries are not unfairly disadvantaged by the concession. The TCO mechanism extends to the national level, impacting all states and territories within Australia. However, certain goods, as specified in section 269SJ, are excluded from this concession. The geographic reach of the Act is nationwide, affecting all entities involved in the importation of goods subject to TCOs. Additionally, the CEO may use subordinate instruments to further specify conditions or applications of the TCOs, thereby extending or restricting the application as necessary.
Key Provisions
The Tariff Concession Instrument No. 1117267, under the Customs Act 1901, pertains to the application of a Tariff Concession Order (TCO) for specific poultry processing disc picker machine parts (section 269F). This instrument was issued by the Chief Executive Officer (CEO) of Customs, following an application by Linco Food Systems Pty Ltd on 31 May 2011. The CEO was satisfied that the application met the core criteria, particularly that no substitutable goods were produced in Australia (section 269C), and thus declared that these parts would be subject to a zero duty rate (item 50 of Schedule 4 to the Customs Tariff Act 1995). This order came into effect on the same date the application was lodged (section 269S(1)).
The Act imposes several obligations on the parties involved. Firstly, any person who wishes to apply for a TCO must ensure that their application meets the core criteria, particularly that no substitutable goods are produced in Australia in the ordinary course of business (section 269C). The CEO, upon receiving a valid application, must make a written order if satisfied with the application (subsection 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). In this case, the CEO did not receive any submissions, which facilitated the swift issuance of the TCO.
In the event of a breach of the provisions outlined in the Customs Act 1901, various civil and criminal consequences may apply. The Act does not specify explicit penalties for breaches related to TCOs, but general provisions under the Customs Act could apply. These may include fines and, in serious cases, criminal prosecution. The exact penalties would depend on the nature and severity of the breach, as well as other relevant laws and regulations.
Overall, the Tariff Concession Instrument No. 1117267 facilitates a zero duty rate for specific poultry processing disc picker machine parts by adhering to the requirements and obligations set forth in the Customs Act 1901. It ensures that the process is transparent and allows for stakeholder input, while also imposing potential civil and criminal consequences for non-compliance.