EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413475
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.
Madlener Family Trust applied for a TCO in respect of certain timber condensation drying kilns on 7 December 2004.
Instrument
TCO No 0413475 was made on 11 February 2005. It declares that those certain timber condensation 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 No. 0413475 is taken to have come into force on 7 December 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 Tariff Concession Instrument No. 0413475, enacted in 2005, is an amendment to the Customs Act 1901. This legislation was introduced to address the need for a streamlined process to grant tariff concessions for specific goods that are not produced in Australia, ensuring that Australian businesses are not unfairly disadvantaged by domestic production of substitutable goods. The instrument was enacted by the Australian Government, with the aim of facilitating trade by reducing the customs duty on certain imported goods, thereby encouraging their availability and use in Australia.
The policy objective of this instrument is to provide a mechanism for the Chief Executive Officer of Customs to consider and approve applications for Tariff Concession Orders, which lower the customs duty on specified imported goods where no substitutable goods are produced in Australia. This approach benefits importers by potentially reducing the cost of imported goods, while also promoting competition and access to a wider range of products in the Australian market. The instrument ensures that the process for granting tariff concessions is transparent and allows for public consultation, as mandated by the Customs Act.
Scope and Application
The Tariff Concession Instrument No. 0413475 under the Customs Act 1901 applies to goods specified in the instrument, in this case, certain timber condensation drying kilns. The instrument was made by the Chief Executive Officer of Customs following an application from Madlener Family Trust, and it pertains to goods for which a lower rate of customs duty applies if no substitutable goods are produced in Australia. The Act applies to the importation of specified goods and provides for the issuance of Tariff Concession Orders (TCOs) to facilitate this. The instrument specifies that the general rate of duty on these kilns is 5%, whereas the rate for goods subject to the TCO is reduced to 3%. The application of the Act extends to all entities and individuals involved in the importation of these goods into Australia, and it has a national jurisdictional reach within the Commonwealth of Australia.
The Act does not impose any liabilities on persons other than the Commonwealth and does not disadvantage anyone with existing rights as of the date of registration. Importers, however, stand to benefit from this TCO as they can apply for a refund of duty on goods imported since the effective date of the TCO, which is 7 December 2004. The CEO published a notice in the Gazette inviting submissions on the TCO application but did not receive any. The application of the Act can be further defined and extended through subordinate instruments, although this specific TCO does not specify any additional instruments.
Key Provisions
The Customs Act 1901, under Part XVA, outlines the procedure for making Tariff Concession Orders (TCOs) which provide for a lower rate of customs duty on certain goods. An application for a TCO can be submitted under section 269F, provided the goods are not specified in section 269SJ as ineligible. The Chief Executive Officer of Customs (CEO) must determine if the application meets the core criteria set out in section 269C, which involves ensuring that no substitutable goods are produced in Australia at the time of the application, as defined by sections 269D and 269E. If the CEO is satisfied with the application, they are mandated to issue a written TCO, declaring that the specified goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, as per subsection 269P(3).
The obligations placed on the parties governed by this Act include the requirement for the CEO to publish a notice in the Gazette after accepting a TCO application as valid, inviting any interested parties to submit reasons why the TCO should not be made, as per subsection 269K(1). In the case of TCO No. 0413475, the CEO did not receive any submissions against the concession. Furthermore, a TCO is deemed to have come into force on the date the application was lodged, as stated in subsection 269S(1), which for TCO No. 0413475, was 7 December 2004.
In terms of penalties and consequences, the Act does not specify particular offences or penalties for breaches related to TCOs. However, the Act ensures that a TCO does not affect the rights of any person (other than the Commonwealth) in a way that disadvantages them or imposes liabilities for actions taken before the TCO's effective date. Importers benefit from the ability to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. The Act explicitly states that a TCO does not impose any new liabilities on any person.