EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510002
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.
Murwillumbah Machinery applied for a TCO in respect of certain Woodchippers and/or Mulchers on 1 August 2005.
Instrument
TCO No 0510002 was made on 21 October 2005. It declares that those certain Woodchippers and/or Mulchers 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 0%.
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. 0510002 is taken to have come into force on 1 August 2005.
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. 0510002, enacted in 2005 under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, in this case, certain woodchippers and mulchers, where no substitutable goods are produced in Australia. The Customs Act 1901, as amended, allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs, providing a lower rate of customs duty on goods that meet the specified criteria. The policy objective behind this instrument is to ensure that importers are not disadvantaged and can benefit from reduced tariffs on goods where no local alternatives exist. The instrument was published in the Gazette with an invitation for submissions, though none were received, and it came into effect on the date of the application, 1 August 2005. The Tariff Concession Order ensures that the rights of importers are positively impacted, allowing them to apply for a refund of duties on imported goods from the effective date.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia by providing for the issuance of Tariff Concession Orders (TCOs) that may reduce the rate of customs duty payable on certain goods. This Act applies to the Chief Executive Officer of Customs (CEO) who is responsible for making TCOs when an application is submitted under section 269F of the Act. The Act applies to the importation of goods, specifically Woodchippers and Mulchers in the case of Tariff Concession Instrument No. 0510002. The Act applies on a national level across Australia, as it is a Commonwealth Act. The Act excludes certain goods as specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations and orders, which provide further detail on the operation of the Act and the issuance of TCOs.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269K, which establish the conditions under which Tariff Concession Orders (TCOs) can be made. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the CEO is satisfied that the application meets the core criteria, outlined in section 269C, which include that no substitutable goods were produced in Australia at the time of the application, they must make a written order. Section 269B provides definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. Section 269P(3) further stipulates that if the application meets the core criteria, the CEO must make a written TCO. Section 269K requires the CEO to publish a notice in the Gazette, inviting submissions on the TCO application, although in this case, no submissions were received.
The obligations imposed by the Act include the requirement for the CEO to ensure that applications for TCOs meet the core criteria specified in section 269C. This involves verifying that no substitutable goods were produced in Australia at the time of the application. The CEO is also obligated to publish a notice in the Gazette, inviting submissions from interested parties, although in this instance, no submissions were made. Furthermore, the Act mandates that the TCO comes into force on the day the application was lodged. The Act also ensures that the rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO's effective date.
If an individual or entity fails to comply with the provisions of this Act, there are potential legal consequences. While the Act does not explicitly detail offences, penalties, or civil/criminal consequences for breach, it is reasonable to infer that non-compliance could lead to legal action. For instance, if an entity applies for a TCO under false pretenses, they might face legal penalties for misrepresentation or fraud. Similarly, if the CEO fails to adhere to the statutory requirements for processing TCO applications, this could result in administrative or judicial repercussions. The specific penalties would depend on the nature and severity of the breach, but they could include fines, restitution, or other legal sanctions as deemed appropriate by the relevant authorities.
In summary, the key provisions of this legislation focus on the process for making Tariff Concession Orders, the criteria that must be met for such orders to be valid, and the obligations of the CEO in processing these applications. The Act ensures that TCOs are made fairly and transparently, and it provides mechanisms for interested parties to provide input. The rights of importers are protected, and the commencement of TCOs is clearly defined. While the Act does not explicitly outline penalties for breaches, non-compliance could result in legal consequences, which would be determined based on the specific circumstances of the breach.