EXPLANATORY STATEMENT
Tariff Concession Instrument No.0412878
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.
Blueleaf Corporation Pty Ltd applied for a TCO in respect of certain timber drying kilns on 30 November 2004.
Instrument
TCO No 0412878 was made on 11 February 2005. It declares that those certain timber drying kilns 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 3%.
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 No0412878 is taken to have come into force on 30 November 2004.
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 to provide for the regulation of customs and excise, including the imposition of tariffs on imported goods. The Act establishes a framework under which Tariff Concession Orders (TCOs) can be made to provide relief from customs duty on certain goods. These concessions are particularly relevant for industries where no domestic production of substitutable goods exists, ensuring that Australian consumers and businesses are not unfairly disadvantaged by high import duties. The Tariff Concession Instrument No.0412878, enacted in 2005, addresses a specific application by Blueleaf Corporation Pty Ltd for tariff concessions on certain timber drying kilns, reducing the duty rate from 5% to 3%. The policy objective of the legislation is to encourage efficient import practices and support industries where local production is not viable, thereby promoting competitive markets and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0412878 under the Customs Act 1901 applies to the specific goods, in this case certain timber drying kilns, that are the subject of a Tariff Concession Order (TCO) application made to the Chief Executive Officer of Customs (CEO). The CEO's role in determining whether to issue a TCO is guided by the provisions in Part XVA of the Customs Act 1901, specifically sections 269C, 269D, 269E, and 269F, which establish the criteria for eligibility based on the absence of substitutable goods produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, as the Customs Act 1901 applies throughout Australia. Section 269SJ of the Act excludes certain goods from being subject to a TCO, such as those specified in the relevant schedule. The commencement of this TCO, effective from the date the application was lodged (30 November 2004), ensures that the rights of the Commonwealth and other stakeholders are protected, with no retroactive liabilities imposed on any person. This particular TCO benefits importers by allowing them to apply for a refund of duty on the goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, as applied through Tariff Concession Instrument No. 0412878, concern the creation and effect of Tariff Concession Orders (TCOs). Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specified goods. If the application meets the core criteria under section 269C, the CEO is required to make a written order, or TCO, declaring that the goods in question are subject to a reduced rate of customs duty as specified in Schedule 4 of the Customs Tariff Act 1995. This particular TCO, number 0412878, applies to certain timber drying kilns, reducing the duty rate from the general 5% to 3%.
The Act imposes specific obligations on the CEO when processing a TCO application. Under section 269C, the CEO must determine whether the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections to the TCO. In this case, no submissions were received by the CEO.
In terms of consequences for breach, the Customs Act 1901 does not explicitly outline offences or penalties for failing to comply with the requirements of a TCO. However, the general framework of the Act, along with associated regulations, implies that non-compliance with customs duty obligations could lead to civil or criminal penalties. For instance, under section 126 of the Customs Regulations 1993, failure to accurately declare goods or misapply tariff concessions could result in fines or other penalties as prescribed by the Act. Although the specific penalties are not detailed in the explanatory statement, it is clear that adherence to the TCO and its terms is crucial to avoid potential legal repercussions.