EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612484
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.
Briggs Veneers Pty Ltd applied for a TCO in respect of certain dyed or plain wood veneers on 26 July 2006.
Instrument
TCO No 0612484 was made on 13 October 2006. It declares that those certain dyed or plain wood veneers 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. 0612484 is taken to have come into force on 26 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 Tariff Concession Instrument No. 0612484 was enacted in 2006 under the Customs Act 1901. This legislative instrument was designed to address the problem of imposing a lower rate of customs duty on specific goods that are not produced in Australia and for which no suitable substitute is available domestically. The Customs Act 1901, enacted by the Commonwealth Parliament, provides a framework for such tariff concessions, allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) based on applications that meet certain criteria. The policy objective behind this legislation is to facilitate the import of goods that are essential for the economy or public interest, provided that they are not being produced within Australia and that there are no suitable domestic alternatives.
The explanatory statement accompanying the Tariff Concession Instrument No. 0612484 indicates that Briggs Veneers Pty Ltd applied for a TCO for certain dyed or plain wood veneers on 26 July 2006. The CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO. Consequently, the CEO issued a written order declaring that the specified wood veneers are subject to a 5% duty rate, down from the general rate, effective from the date the application was lodged. This legislative instrument ensures that the rights of importers are beneficially affected and that no liabilities are imposed on any person as a result of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0612484, established under Part XVA of the Customs Act 1901, applies to specific goods that are subject to a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs (CEO). This particular TCO relates to certain dyed or plain wood veneers and is applicable to Briggs Veneers Pty Ltd. The TCO applies on a national level within Australia and is designed to provide a lower rate of customs duty for these specified goods, contingent on the CEO's satisfaction that no substitutable goods are produced in Australia in the ordinary course of business. The TCO does not affect any existing rights of persons other than the Commonwealth, thereby ensuring that it does not disadvantage or impose liabilities on any individual or entity prior to its registration. Importers of these goods will benefit from this concession as they can apply for a refund of duty on goods imported since the TCO's effective date of 26 July 2006. The CEO’s decision-making process involves considering applications against the core criteria outlined in the Customs Act 1901 and the Customs Tariff Act 1995, ensuring that the concession is only granted when it meets the specified conditions.
Key Provisions
The main operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ (subsections 269K(1) and 269S(1)). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, the CEO must make a written order declaring the goods as subject to the TCO. The TCO specifies the lower rate of customs duty for the goods, as outlined in the Customs Tariff Act 1995. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The TCO is deemed to have come into force on the date the application was lodged (subsection 269S(1)).
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must review the application and determine if it meets the core criteria, specifically whether no substitutable goods were produced in Australia on the date the application was lodged. Substitutable goods are defined as those produced in Australia that could be used in the same way as the goods subject to the TCO (section 269D). If the CEO is satisfied that the application meets the criteria, they must make a written TCO order and publish a notice in the Gazette inviting submissions. The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on such persons in respect of actions taken before the TCO was registered.
Breaching the provisions of the Customs Act 1901 can result in both civil and criminal consequences. For instance, making false statements in an application for a TCO can be considered an offence under section 269R of the Act. This offence carries a maximum penalty of five years imprisonment or a fine of up to 5,000 penalty units, or both. Additionally, failing to comply with the requirements of a TCO can result in the imposition of additional duties or penalties, as determined by the Commissioner of Customs. The Commissioner has the authority to take action against those who do not comply with the Act's provisions, including the recovery of unpaid duties and interest, as well as potential legal proceedings.