EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604620
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.
Wichard Pacific applied for a TCO in respect of certain yacht furlers and or reefers on 1 March 2006.
Instrument
TCO No 0604620 was made on 12 May 2006. It declares that those certain yacht furlers and or reefers 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. 0604620 is taken to have come into force on 1 March 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. 0604620 was enacted in 2006 under the Customs Act 1901 to provide a concession on customs duties for certain specified goods, in this case, yacht furlers and reefers, thereby addressing the problem of potentially high tariffs on imported goods that have no Australian-made equivalents. This instrument was introduced to facilitate smoother trade practices and to benefit importers by reducing the duty rates on these goods, ultimately supporting the Australian economy by making such products more competitively priced. The instrument was made by the Chief Executive Officer of Customs following a valid application by Wichard Pacific, and no objections were raised during the consultation period. The instrument came into effect on the date the application was lodged, in line with the provisions of the Customs Act, ensuring that the rights of importers are protected and that no existing liabilities are imposed retroactively.
Scope and Application
The Tariff Concession Instrument No. 0604620 under the Customs Act 1901 applies to the concession of customs duty for certain yacht furlers and reefers, as requested by Wichard Pacific. The instrument, which came into effect on 1 March 2006, is applicable to the specific goods that are the subject of the Tariff Concession Order (TCO) granted by the Chief Executive Officer of Customs. The Act applies to entities or individuals who import or intend to import these goods into Australia. The scope of the Act is national, extending to all parts of Australia under Commonwealth jurisdiction, and it is administered by the CEO of Customs. There are exclusions as per section 269SJ of the Act, which details goods that cannot be subject to a TCO. No submissions opposing the TCO were received, indicating broad acceptance or lack of contention regarding the concession. The application of the Act may be extended or refined through subordinate instruments, such as regulations, which can provide additional details or exceptions to the general provisions.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods, provided those goods do not fall under section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must determine if the application meets the core criteria, outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269B, respectively. If the CEO is satisfied that the application meets these criteria, they must issue a written order, a TCO, as per section 269P(3), specifying the applicable tariff concession.
The obligations imposed by the Customs Act 1901 on the parties governed by this legislation include the duty of the CEO to evaluate TCO applications against the core criteria. This involves assessing whether any substitutable goods were produced in Australia in the ordinary course of business at the time of application. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, as mandated by section 269K(1). The CEO's duty also includes making a written order if the application meets the criteria and ensuring that the TCO is taken to have come into force on the day the application was lodged, in accordance with section 269S(1).
Breaching the requirements of the Customs Act 1901 regarding TCOs can result in legal consequences. While the explanatory statement does not specify particular offences, penalties, or civil/criminal consequences for non-compliance, it is reasonable to infer that failure to adhere to the statutory requirements for TCOs could lead to administrative penalties or legal challenges. The specific penalties would likely be determined by the relevant provisions of the Customs Act 1901 and any applicable regulations. The Act's focus on ensuring that TCOs are granted fairly and in accordance with the set criteria suggests that any breaches could be met with serious repercussions, including potential legal action to enforce compliance or to rectify any adverse effects resulting from improper TCO issuance.