EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618825
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.
Carter Holt Harvey applied for a TCO in respect of certain particle board press parts on 23 November 2006.
Instrument
TCO No 0618825 was made on 05 March 2007. It declares that those certain particle board press parts 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. 0618825 is taken to have come into force on 23 November 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 was enacted to provide a framework for the administration of customs and excise in Australia, including the regulation of imported and exported goods. The Tariff Concession Instrument No. 0618825, introduced in 2007, addresses the need for tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on certain goods. This instrument was developed in response to an application from Carter Holt Harvey for tariff concessions on certain particle board press parts, where the CEO found that no substitutable goods were produced in Australia. The objective of this legislation is to ensure that Australian businesses can access necessary goods at a reduced cost, thereby promoting economic efficiency and competitiveness.
The Australian Parliament enacted this instrument to streamline the process of applying for and granting tariff concessions, ensuring that the rights of importers are protected and that no liabilities are imposed on individuals as a result of the TCO. This legislative action was taken to foster an environment conducive to trade by facilitating access to essential goods at a lower cost, ultimately benefiting the broader economy. The process includes mandatory consultation with the public, as outlined in the Act, although in this case, no submissions were received against the concession.
Scope and Application
The Tariff Concession Instrument No. 0618825 applies to goods, specifically certain particle board press parts, and is subject to the Customs Act 1901 and the Customs Tariff Act 1995. This instrument was enacted to facilitate tariff concessions, lowering the customs duty rate on specified goods, in this case, from 5% to free. The application of this Act is limited to the entities that can apply for such concessions, which must meet the core criteria as stipulated in the Act, namely, the absence of substitutable goods produced in Australia at the time of application. The geographic reach of this Act is national, applying across Australia, and it extends to all industries and transactions involving the importation of the specified goods. The Act does not impose any liabilities on any person and does not disadvantage any person other than the Commonwealth, while potentially benefiting importers by allowing them to apply for a refund of duty. The application of this Act can be further extended or restricted through subordinate instruments, although this particular instance does not provide for such extensions.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework whereby the Chief Executive Officer (CEO) of Customs can issue Tariff Concession Orders (TCOs) (section 269F). These orders allow for a reduced rate of customs duty on specified goods. To qualify for a TCO, an application must be made to the CEO, and the goods in question must not fall under the categories specified in section 269SJ of the Act, which are ineligible for tariff concessions. The CEO must then assess whether the application meets the core criteria set out in section 269C of the Act, which generally require that no substitutable goods are produced in Australia at the time the application is lodged.
Entities or individuals who wish to apply for a TCO must ensure that their application complies with the requirements outlined in the Act. This includes demonstrating that the goods in question are not being produced domestically, which is a critical criterion evaluated by the CEO. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections or submissions if they believe the TCO should not be granted (subsection 269K(1)). Any such submissions must be considered by the CEO before making a decision on the TCO.
Failure to comply with the requirements of the Customs Act 1901 or any associated regulations can result in civil or criminal penalties. For example, under section 281 of the Act, individuals or entities that wilfully make false statements or representations in an application for a TCO may face criminal prosecution. Such offences can attract penalties including substantial fines and, in some cases, imprisonment. The specifics of these penalties are determined by the court and can vary based on the severity and circumstances of the offence.
Additionally, under section 283 of the Act, any person who contravenes the Act or the regulations may be subject to civil penalties. These can include fines up to a significant amount, depending on the breach and the discretion of the court. The Act also provides mechanisms for the recovery of duties and penalties through administrative processes, ensuring that non-compliance is met with appropriate repercussions.
The TCO instrument number 0618825, issued on 5 March 2007, is an example of how the process works in practice. Carter Holt Harvey applied for a TCO concerning certain particle board press parts, which were declared to be subject to a zero rate of duty as no substitutable goods were produced in Australia. This TCO is effective from 23 November 2006, the date the application was lodged, and does not retroactively affect any prior transactions or liabilities, thus protecting the rights of all parties except the Commonwealth.