EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607741
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.
Durisol Pty Ltd applied for a TCO in respect of certain cement bonded wood fibre panels on 02 May 2006.
Instrument
TCO No 0607741 was made on 14 July 2006. It declares that those certain cement bonded wood fibre panels 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. 0607741 is taken to have come into force on 02 May 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. 0607741, enacted in 2006, was introduced to address the need for a mechanism within the Customs Act 1901 to allow for tariff concessions on specific imported goods. This instrument operates under the authority of the Chief Executive Officer of Customs, who has the power to make Tariff Concession Orders (TCOs) that provide a lower rate of customs duty on goods that meet certain criteria. The policy objective is to ensure that the application of customs duties is fair and that no domestic industry is unfairly disadvantaged by the import of similar goods. The instrument was designed to respond to applications such as the one submitted by Durisol Pty Ltd for certain cement bonded wood fibre panels, which were granted a tariff concession following a determination that no substitutable goods were produced in Australia at the time of the application.
The instrument was created in accordance with the provisions of the Customs Act 1901, which outlines the conditions under which a TCO may be issued. After Durisol Pty Ltd applied for the concession, the CEO determined that the application met the core criteria and subsequently issued Tariff Concession Order No. 0607741. This order sets the rate of duty for the specified panels at free, effective from the date the application was lodged, thereby reducing the financial burden on importers of these goods. The instrument was subject to a public consultation process as mandated by the Act, though no submissions were received. The order does not affect the rights of any person as at the date of registration, ensuring that it does not disadvantage or impose liabilities on anyone other than the Commonwealth.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). These TCOs apply to specific goods that meet certain criteria, enabling a lower rate of customs duty for those goods. The Act permits individuals to apply for a TCO on goods, provided the application does not pertain to goods explicitly excluded under section 269SJ. If the application meets the core criteria outlined in sections 269C, 269B, 269D, and 269E, the CEO must issue a written order. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received for TCO No. 0607741. This particular TCO, effective from the date of application, benefits importers by allowing them to apply for duty refunds on goods imported since the commencement date, without imposing any additional liabilities. The TCO does not affect any existing rights or liabilities of parties other than the Commonwealth prior to its registration.
Key Provisions
The Tariff Concession Instrument No. 0607741, pursuant to section 269P(3) of the Customs Act 1901, is a written order that provides a lower rate of customs duty for certain cement bonded wood fibre panels. Specifically, section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application for a Tariff Concession Order (TCO) meets the core criteria, a TCO must be made. This instrument was issued on 14 July 2006 and specifies that the general duty rate of 5% is reduced to free for these panels under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations on parties applying for a TCO. According to section 269C, an application for a TCO 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. Furthermore, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who may oppose the TCO. In this case, no submissions were received. Once the CEO is satisfied that the application meets the core criteria, the TCO becomes effective as of the date the application was lodged, pursuant to subsection 269S(1).
The Customs Act 1901 provides for potential consequences in the event of non-compliance with the provisions governing TCOs. While the explanatory statement does not specify particular offences, breaches of the Act's provisions related to customs duties can result in penalties. Under the Customs Act, penalties for non-compliance can include fines and imprisonment. For example, section 241A provides that a person who contravenes a provision of the Act may be fined up to 10,000 penalty units or imprisoned for up to five years, or both, for a serious offence. The Act also allows for civil penalties, which can include financial penalties for breaches related to customs duties.