EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606867
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.
Jaden Ornamental Holdings applied for a TCO in respect of certain wooden cornices and or base boards and or chair rails on 12 April 2006.
Instrument
TCO No 0606867 was made on 7 July 2006. It declares that those certain wooden cornices and or base boards and or chair rails 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. 0606867 is taken to have come into force on 12 April 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for the administration of customs and excise duties in Australia. The introduction of Tariff Concession Orders (TCOs) through Part XVA of the Act aims to provide relief to importers by reducing or eliminating customs duties on certain goods, provided specific criteria are met. This concession is designed to benefit industries that rely on imported materials or products, ensuring they remain competitive within the Australian market. The Tariff Concession Instrument No. 0606867, made on 7 July 2006, addresses the specific application by Jaden Ornamental Holdings for tariff concessions on wooden cornices, base boards, and chair rails, which are now subject to a free rate of duty rather than the general 5% rate. This legislative instrument was created following a formal application process and public consultation, ensuring that no party's rights were adversely affected and that the concession aligns with the policy objectives of supporting Australian industry.
Scope and Application
The Tariff Concession Instrument No. 0606867 under the Customs Act 1901 applies to the specific goods, namely certain wooden cornices and or base boards and or chair rails, as identified by Jaden Ornamental Holdings in their application dated 12 April 2006. The application of this Instrument is confined to the goods specified in the application, and it does not extend to any other goods unless similarly applied for and approved. The geographic reach of this Instrument is national, as it pertains to the Commonwealth of Australia and its customs regulations. The Instrument excludes any goods specified in section 269SJ of the Act, which includes goods that are prohibited from being subject to a Tariff Concession Order. The application of this Instrument may be further extended or restricted through subordinate instruments, although no such extensions or restrictions are noted in the context of this particular Instrument.
The Instrument became effective on 12 April 2006, the date on which the application was lodged, in accordance with subsection 269S(1) of the Act. Importantly, the Instrument does not adversely affect the rights of any person, other than the Commonwealth, as at the date of registration. Importers of the specified goods stand to benefit from this Instrument as they can apply for a refund of duty on goods imported since the effective date of the Instrument. No new liabilities are imposed on any person under this Instrument. The Chief Executive Officer of Customs was required to publish a notice in the Gazette inviting submissions from any person who considered there were reasons why the Tariff Concession Order should not be made, although no such submissions were received in response to the published notice.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0606867 (paragraphs 269C, 269B, 269E, 269P(3)) establish the framework for the making of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269C requires that a TCO application meets core criteria, specifically, that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B outlines the definitions of key terms such as "goods produced in Australia", "ordinary course of business" and "substitutable goods". Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must issue a written order, or TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this case, the TCO, number 0606867, was made on 7 July 2006, declaring that certain wooden cornices, base boards and chair rails are subject to a zero duty rate under item 50 of Schedule 4 to the Tariff.
The obligations imposed by the Act on the CEO are substantial. Once an application for a TCO is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be granted (subsection 269K(1)). The CEO is also required to ensure that the application meets the core criteria set out in section 269C, which involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. Furthermore, the CEO must decide whether to issue the TCO if the application meets the criteria, as specified in section 269P(3). In this instance, the CEO issued TCO No. 0606867 after being satisfied that the application met the core criteria.
In terms of potential breaches and consequences, the Act does not explicitly detail offences or penalties for non-compliance with the TCO process. However, if an entity fails to adhere to the requirements of the Customs Act 1901 or the Tariff, it may face legal action or administrative penalties. For example, an entity that falsely claims eligibility for a TCO might be subject to civil or criminal penalties under other sections of the Act. The precise penalties would depend on the nature and severity of the breach, but could include fines or imprisonment. Additionally, the CEO has the authority to impose financial penalties or other sanctions on entities that violate the terms of a TCO, such as by importing goods that do not qualify for the concession.