EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606868
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 Mouldings applied for a TCO in respect of certain wood carved corbels on 12 April 2006.
Instrument
TCO No 0606868 was made on 7 July 2006. It declares that those certain wood carved corbels 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. 0606868 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, as supplemented by the Tariff Concession Instrument No. 0606868 enacted in 2006, was introduced to address the need for a streamlined process through which Australian importers could apply for tariff concessions on specific goods, thereby reducing their customs duties. This Instrument facilitates the application of lower rates of customs duty to certain imported goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) upon meeting specific criteria, as outlined in the Act. The policy objective is to support Australian importers by reducing the cost of importing goods, which in turn could potentially lower consumer prices and support competitive markets.
The Instrument was enacted by the Parliament of Australia and is designed to ensure that the process for applying for tariff concessions is clear and efficient, while also providing a safeguard for importers by ensuring that the concession does not affect their rights or impose new liabilities. The Tariff Concession Instrument No. 0606868 specifically provides for a zero percent duty rate on certain wood carved corbels, effective from the date the application was lodged, subject to the conditions that no substitutable goods were produced in Australia at the time of application. This measure aims to enhance trade efficiency and support the importation of goods that are not locally produced.
Scope and Application
The Tariff Concession Instrument No. 0606868 under the Customs Act 1901 applies to any individual or entity that imports goods specified in the Instrument, namely certain wood carved corbels, which are subject to a concession on the rate of customs duty. This Instrument is part of a broader scheme within Part XVA of the Customs Act 1901, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply reduced rates of customs duty to specified goods. The application of the Instrument is governed by the condition that no substitutable goods are produced in Australia at the time of the application. The Instrument has a national jurisdictional reach, operating across Australia in accordance with federal customs regulations. The Instrument does not specify any exclusions, exemptions, or thresholds beyond the criteria set out in the Customs Act 1901, but it does note that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person. The commencement date of the TCO is the same as the date the application was lodged, ensuring that the benefits are effective from the date of application. The Instrument may be extended or restricted through subordinate instruments, such as regulations, but this specific Instrument does not detail such provisions.
Key Provisions
The Tariff Concession Instrument No. 0606868, made under the Customs Act 1901, establishes specific conditions under which certain wood carved corbels are exempt from customs duty (section 269P(3)). The instrument was made on 7 July 2006, following an application by Jaden Ornamental Mouldings on 12 April 2006. The instrument specifies that these wood carved corbels are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced customs duty rate of 0% (section 269P(3)). Ordinarily, the general rate of duty for these goods is 5%.
The obligations under this legislation primarily fall on the Chief Executive Officer of Customs (CEO) who must assess the validity of applications for Tariff Concession Orders (TCOs). The CEO is required to determine if an application meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO must also publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO if they believe it should not proceed (subsection 269K(1)). In the case of TCO No. 0606868, no objections were received.
Failure to comply with the requirements set out in the Customs Act 1901 may result in legal consequences. The Act does not explicitly outline specific penalties for non-compliance with TCO provisions, but breaches of related customs regulations can result in civil or criminal penalties. Civil penalties can include fines up to a significant amount, depending on the nature and severity of the breach. Criminal penalties might involve imprisonment, reflecting the seriousness of the offence. Additionally, any person who knowingly makes a false statement in an application for a TCO may face further penalties under the Customs Act, including fines and imprisonment.