EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610961
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.
Carba-Tec Pty Ltd applied for a TCO in respect of certain wood dust and/or dust extractors on 29 June 2006.
Instrument
TCO No 0610961 was made on 22 September 2006. It declares that those certain wood dust and/or dust extractors 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. 0610961 is taken to have come into force on 29 June 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. 0610961, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods by allowing for reduced customs duties. This instrument was introduced to facilitate the application of lower rates of customs duty on certain goods, as permitted under section 269F of the Customs Act, which allows for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. The instrument was enacted to ensure that goods, such as certain wood dust and/or dust extractors, which are subject to a TCO, are eligible for a reduced duty rate of free, as opposed to the general rate of 5%. The CEO is required to assess whether an application meets the core criteria set out in section 269C of the Act, particularly by determining if no substitutable goods were produced in Australia on the day the application was lodged. The instrument was made on 22 September 2006, and it came into force on 29 June 2006, the day the application was lodged. Importantly, the TCO does not affect the rights of any person adversely and allows for the potential refund of duty for importers under the relevant regulations.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person who wishes to apply for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act. This section excludes certain goods that cannot be subject to a TCO, such as those which are of a nature that might harm national security or public health. The application process requires that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by the Act. The CEO must make a written order if satisfied that the application meets the core criteria, effectively granting tariff concessions on specified goods. The geographic reach of this legislation is national, as it applies throughout Australia. Additionally, the application of this Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which provides the schedule of duty rates, including those subject to TCOs.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) under section 269F, which can provide lower customs duty rates for specific goods. A person can apply to the Chief Executive Officer of Customs (the CEO) for a TCO if the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must then decide if the application meets the core criteria under sections 269C, 269B, and 269D of the Act, which pertain to the production and substitution of goods in Australia. If the CEO is satisfied that no substitutable goods are produced in Australia, they must make a written order declaring the goods to which the TCO applies, under section 269P(3).
The obligations imposed by the Act on parties subject to a TCO include ensuring that any applications for TCOs are lodged in accordance with the statutory requirements and that they do not apply for goods that are explicitly excluded by section 269SJ of the Act. The CEO is required to publish a notice in the Gazette inviting submissions if a TCO application is accepted as valid, as per subsection 269K(1). The CEO must also decide whether the application meets the core criteria set out in section 269C, taking into account the definitions and meanings provided by sections 269B and 269D.
Breaches of the provisions of the Customs Act 1901 that govern TCOs may result in civil or criminal consequences. The Act does not specify particular offences or penalties for non-compliance with TCOs; however, general provisions within the Customs Act may apply. For example, section 245 of the Act outlines penalties for offences such as making a false or misleading statement, which could include fines or imprisonment depending on the severity of the offence. The specific penalties are not detailed in the explanatory statement but would be determined in accordance with the broader legal framework provided by the Customs Act.