EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604320
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.
Forest Centre applied for a TCO in respect of certain log loaders on 23 February 2006.
Instrument
TCO No 0604320 was made on 12 May 2006. It declares that those certain log loaders 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. 0604320 is taken to have come into force on 23 February 2006.
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. 0604320 was enacted in 2006 under the Customs Act 1901. This legislative instrument was introduced to address the need for tariff concessions on certain imported goods, specifically log loaders in this instance, which were found not to have substitutable goods produced in Australia. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to goods that meet specific criteria, particularly if no substitutable goods are produced in Australia. The policy objective of this legislation is to facilitate the importation of goods that cannot be locally produced, thereby supporting industries that rely on imported components or machinery. The instrument came into force on the date the application was lodged, 23 February 2006, and does not affect any pre-existing rights or impose liabilities on any person except the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. These orders can be applied for by any person, provided the goods in question are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria outlined in sections 269C, 269B, and 269D of the Act, including ensuring that no substitutable goods are being produced in Australia at the time of application. The TCO applies nationwide, governed by the Commonwealth, and its effect is retroactive to the date the application was lodged, as stipulated in section 269S(1) of the Act. Importantly, the TCO does not disadvantage any person or impose liabilities for actions taken prior to the order's registration. Instead, it potentially benefits importers by allowing them to apply for duty refunds under Regulation 126(1)(r) for goods imported since the effective date of the concession.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process by which Tariff Concession Orders (TCOs) are granted. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the CEO determines that the application does not pertain to goods excluded under section 269SJ, they must assess whether the application meets the core criteria set forth in section 269C. A TCO application meets these criteria if, on the date it was submitted, no substitutable goods were produced in Australia in the ordinary course of business. The meanings of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are further defined in sections 269D, 269E, and 269P(3) respectively.
The obligations imposed by the Act on the parties involved are primarily procedural. The CEO must publish a notice in the Gazette once an application is accepted as valid, inviting submissions from any interested parties who believe the TCO should not be granted. This process ensures transparency and allows for stakeholder input before a decision is made. Once the CEO is satisfied that the application meets the core criteria, they are required to make a written order (a TCO) specifying that the goods in question are subject to a particular duty rate as outlined in Schedule 4 to the Customs Tariff Act 1995.
The Act also includes provisions regarding the penalties and consequences for non-compliance. Although the explanatory statement does not specify penalties, generally, breaches of the Customs Act can result in both civil and criminal consequences. Civil penalties can include fines up to the maximum prescribed by law, while criminal offences can lead to imprisonment, with the severity of the penalty depending on the nature and extent of the breach. The TCO itself does not disadvantage any person or impose new liabilities, but it does provide for potential refunds of duty for importers of the affected goods under the relevant regulations.