EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611453
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.
Howard Australia Pty Ltd applied for a TCO in respect of certain round hay bale handlers on 4 July 2006.
Instrument
TCO No 0611453 was made on 22 September 2006. It declares that those certain round hay bale handlers 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. 0611453 is taken to have come into force on 4 July 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 Tariff Concession Orders (TCOs) which allow for reduced customs duty rates on certain goods. The act sought to address the problem of ensuring fair trade practices by providing relief through tariff concessions where appropriate, particularly for goods not produced domestically. The Tariff Concession Instrument No. 0611453, made under this Act, was introduced to provide a tariff concession for certain round hay bale handlers, reducing the duty rate from 5% to 0%. The policy objective was to support businesses by lowering the cost of importing these specific goods, thereby encouraging their availability and use in Australia. This instrument was made effective from 4 July 2006, the date the application was lodged, and no submissions opposing the concession were received during the consultation period.
Scope and Application
The Customs Act 1901, through Part XVA, provides the framework for the implementation of Tariff Concession Orders (TCOs) which enable the reduction of customs duty on specified goods. The Act applies to any person or entity seeking a concession on customs duty for goods that are not produced in Australia in the ordinary course of business and for which no substitutable goods are available domestically. The scope of the Act is national, and its application is overseen by the Chief Executive Officer of Customs. The Act excludes certain goods from being eligible for a TCO, as defined in section 269SJ. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments. In this instance, Tariff Concession Instrument No. 0611453 was created in response to an application by Howard Australia Pty Ltd, which successfully demonstrated that no substitutable goods were produced in Australia, leading to a zero percent duty rate on specified round hay bale handlers. This Instrument came into effect on the date of the application, 4 July 2006, and provides benefits to importers by potentially allowing them to apply for a refund of duty paid on these goods since that date.
Key Provisions
Section 269F of the Customs Act 1901 allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). The CEO must then determine whether the application meets the core criteria set out in section 269C, which require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a specified lower rate of customs duty as per Schedule 4 of the Customs Tariff Act 1995. For example, Howard Australia Pty Ltd successfully applied for a TCO for certain round hay bale handlers, which resulted in a duty rate of 0% instead of the general rate of 5%.
The obligations imposed by the Customs Act 1901 on the parties involved include the requirement for applicants to ensure their applications meet the specified criteria. The CEO is obligated to review applications, consult with relevant parties if necessary, and make a decision on whether to grant the TCO. If a TCO is granted, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the order. In the case of TCO No. 0611453, no submissions were received, and the TCO came into effect on the date the application was lodged, 4 July 2006.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. The Act does not explicitly state the offences, penalties, or consequences for non-compliance with TCO applications or the requirements of the Act. However, general provisions within the Act and related regulations may apply, including fines and imprisonment for breaches of customs laws. The specific penalties would depend on the nature and severity of the breach, as outlined in other sections of the Customs Act 1901 and the Customs Regulations 1999. It is important for applicants and the CEO to adhere to the legislative requirements to avoid any potential legal repercussions.