EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613085
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 square bale hay pickers and/or stackers on 07 August 2006.
Instrument
TCO No 0613085 was made on 27 October 2006. It declares that those certain square bale hay pickers and/or stackers 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. 0613085 is taken to have come into force on 07 August 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. 0613085 was enacted under the Customs Act 1901 to provide a tariff concession for specific goods, in this case certain square bale hay pickers and/or stackers, which were applied for by Howard Australia Pty Ltd. This instrument addresses the gap in duty concessions for goods that are not substitutable by Australian-produced equivalents. The instrument was enacted by the Chief Executive Officer of Customs, who is empowered under section 269F of the Act to make such orders upon satisfying the core criteria, which include the absence of substitutable goods produced in Australia at the time of the application. The primary policy objective of this instrument, as outlined in the explanatory statement, is to provide relief to importers of these specified goods by allowing them to apply for a refund of any duty paid since the date the TCO was taken to have come into force, thereby ensuring that they are not disadvantaged by the duty reduction.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislative provision allows for the application of a reduced customs duty rate on certain goods, provided they meet the criteria outlined in the Act. An entity or individual may apply to the CEO for a TCO concerning goods, and if the application aligns with the conditions set forth in the Act, the CEO is obligated to issue a TCO, which declares that the goods in question are subject to a specified rate of duty in Schedule 4 of the Customs Tariff Act 1995. This process applies to all entities and individuals who import or intend to import the specified goods into Australia, with no substitutable goods being produced in Australia at the time of the application. The application of this legislation is national in scope, impacting all importers across the Commonwealth of Australia. The TCO does not disadvantage any person or impose liabilities for actions taken before the order's registration date. Additionally, the TCO can be extended or restricted through subordinate instruments, providing flexibility in its application.
Key Provisions
The primary sections of this legislation (section 269F, 269C, 269B, 269D, 269E, 269P(3)) establish a framework for the application and approval of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO is required to assess whether the application meets the core criteria outlined in section 269C, which hinges on the absence of substitutable goods produced in Australia at the time the application is lodged (section 269B, 269D, 269E). If these criteria are satisfied, the CEO must issue a written order (TCO) under section 269P(3), specifying that the goods in question will be subject to a reduced or free customs duty rate. In this case, Tariff Concession Order No. 0613085, made on 27 October 2006, applies to certain square bale hay pickers and/or stackers, reducing their duty rate from 5% to free.
The obligations under this legislation primarily involve the CEO ensuring that the core criteria are met before issuing a TCO. The CEO must publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this instance. The TCO process is designed to be transparent and to allow for public input, as mandated by subsection 269K(1). Additionally, the legislation ensures that the TCO does not affect the rights of any person other than the Commonwealth, as stipulated by subsection 269S(1), which also outlines the commencement date of the TCO.
Any breaches of the conditions set out in the Customs Act 1901 may result in legal consequences. Although the specific offences, penalties, or consequences are not detailed in the explanatory statement, it is understood that non-compliance with customs regulations generally carries significant civil and criminal penalties. These can include fines and imprisonment, depending on the severity and intent of the breach. The maximum penalties for customs-related offences can be found in other sections of the Customs Act 1901 and associated regulations, which may impose substantial financial penalties and/or imprisonment for those found guilty of contravening the Act.