EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620122
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.
Borg Manufacturing Pty Ltd applied for a TCO in respect of certain linear profile shapes timber sprayers on 21 December 2006.
Instrument
TCO No 0620122 was made on 16 March 2007. It declares that those certain linear profile shapes timber sprayersfruit and/or vegetable peelers and/or washers 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. 0620122 is taken to have come into force on 21 December 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. 0620122, enacted in 2007 under the Customs Act 1901, addresses the need for tariff concessions for certain imported goods, specifically linear profile shapes timber sprayers used for fruit and/or vegetable peeling and washing. This instrument was introduced to facilitate the import of these goods by granting them a tariff concession, which effectively reduces the customs duty from the general rate of 5% to free. The enactment of this instrument by the Chief Executive Officer of Customs was prompted by an application from Borg Manufacturing Pty Ltd, which sought tariff concessions for these specific goods. The instrument is designed to benefit importers by allowing them to apply for a refund of duty paid on these goods since the date the tariff concession was deemed to have come into effect, without imposing any liabilities on any person. This legislative measure ensures that the import of these goods is made more economically viable, thereby supporting their availability and use in Australia.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be made to allow for a lower rate of customs duty on specified goods. This legislation applies to any person who applies to the Chief Executive Officer of Customs for a TCO in respect of goods, provided the application is not for goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The application must meet the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as defined in sections 269C and 269D of the Act. Once the application meets these criteria, a TCO is made, and the specified goods are subject to a prescribed rate of duty as outlined in the Customs Tariff Act 1995. The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person. It is effective from the date the application for the TCO was lodged.
Key Provisions
The Tariff Concession Instrument No. 0620122 under the Customs Act 1901 establishes a tariff concession order (TCO) for certain linear profile shapes timber sprayers fruit and/or vegetable peelers and/or washers. The primary sections involved in this process are section 269F (269P(3)) and section 269C of the Act, which outline the application process for a TCO and the core criteria that must be met. When Borg Manufacturing Pty Ltd applied for a TCO on 21 December 2006, the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were being produced in Australia, thus meeting the core criteria (section 269C). Consequently, the CEO issued Instrument TCO No. 0620122 on 16 March 2007, declaring that the specified goods are subject to a lower rate of customs duty, in this case, free of duty.
The Act imposes several obligations and requirements on the parties involved in the TCO process. Firstly, any person may apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act (section 269F). The CEO must assess whether the application meets the core criteria, specifically ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). This process ensures transparency and allows for any objections to be raised before the TCO is finalised.
Failure to comply with the requirements of the Customs Act 1901 or the terms of the TCO may result in legal consequences. The Act does not explicitly detail specific offences, penalties, or consequences for breaches of the TCO. However, general provisions within the Customs Act may apply, which could include fines, imprisonment, or other civil and criminal penalties for non-compliance. The maximum penalties would depend on the specific nature of the breach and would be determined in accordance with the relevant sections of the Customs Act and any other applicable legislation.
Overall, the Tariff Concession Instrument No. 0620122 provides a clear framework for applying for and issuing tariff concession orders, ensuring that the process is fair and transparent. The obligations placed on the CEO and applicants are designed to ensure that the concession is granted appropriately, and any breaches of the Act or the TCO could lead to significant legal repercussions.