EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510517
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.
Aussie Furniture applied for a TCO in respect of certain Borers and/or Tenoners and/or Mortisers and/or Millers and/or End Cutters on 8 August 2005.
Instrument
TCO No 0510517 was made on 21 October 2005. It declares that those certain Borers and/or Tenoners and/or Mortisers and/or Millers and/or End Cutters 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. 0510517 is taken to have come into force on 8 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 Customs Act 1901, enacted by the Commonwealth Parliament, established a framework for the regulation of customs and excise duties, including the ability to grant tariff concessions on certain goods through Tariff Concession Orders (TCOs). This legislative mechanism was designed to address the need for reduced customs duty rates on specific goods where substitutable Australian-made alternatives do not exist, thereby encouraging trade and investment. In 2005, the Tariff Concession Instrument No. 0510517 was introduced to provide tariff concessions on certain woodworking machinery, such as Borers, Tenoners, Mortisers, Millers, and End Cutters, following an application by Aussie Furniture. This instrument was enacted to ensure that these goods would be subject to a 0% duty rate, as no substitutable goods were produced in Australia at the time of the application. The policy objective was to support the importation of these specific machinery items, thereby potentially reducing costs for businesses that rely on such equipment and fostering competitive pricing in the market.
Scope and Application
The Tariff Concession Instrument No. 0510517 under the Customs Act 1901 applies specifically to certain types of machinery, namely Borers, Tenoners, Mortisers, Millers, and End Cutters, which Aussie Furniture sought to import. The Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce the rate of customs duty on goods, provided the application meets the core criteria outlined in the Act, such as the absence of substitutable goods being produced in Australia. This concessional treatment is effective from the date the application for the TCO is lodged, as stipulated in the Act. The application process mandates the CEO to publish a notice in the Gazette inviting any interested parties to submit objections; however, in this case, no objections were received. The TCO does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth, thereby ensuring that the rights of importers are beneficially affected, with an opportunity to claim refunds on duties paid before the TCO came into effect.
The geographic reach of this legislation is inherently tied to the Australian Customs framework, applying nationally across the Commonwealth as per the Customs Act 1901. It does not specify any exclusions or exemptions other than those outlined in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The Act allows for further extension or restriction of application through subordinate instruments, ensuring flexibility and adaptability to varying economic and trade conditions.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269S. Section 269C provides that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P outlines that if the Chief Executive Officer (CEO) is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S specifies that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person wishing to apply for a TCO must ensure their application meets the core criteria outlined in section 269C. The CEO is required to decide whether an application meets these criteria and must make a written order if satisfied. The CEO must also publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as valid, as per subsection 269K(1). If the CEO does not receive any submissions, they can proceed to make the TCO.
There are no specific offences or penalties mentioned in this legislation for breach of the TCO provisions. However, any party that contravenes the terms of the TCO or related provisions in the Customs Act 1901 may face general legal consequences under Australian law. These could include civil liabilities for damages or criminal penalties if the breach is considered serious enough. The specific penalties would depend on the nature and extent of the breach, as well as other relevant laws.