EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700712
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.
3 Rivers Lucerne Ltd applied for a TCO in respect of certain long fibre lucerne dryers on 15 January 2007.
Instrument
TCO No 0700712 was made on 30 March 2007. It declares that those certain long fibre lucerne dryers 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. 0700712 is taken to have come into force on 15 January 2007.
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. 0700712, enacted in 2007 under the Customs Act 1901, addresses the need for a more streamlined process for applying for tariff concessions on certain imported goods, specifically certain long fibre lucerne dryers. The Act, administered by the Parliament of Australia, aims to facilitate trade by reducing customs duty rates on goods that are not produced in Australia and for which there are no substitutable goods produced domestically. The policy objective is to encourage the import of goods that are not locally produced, thereby supporting industry competitiveness and economic efficiency. The instrument was made following an application by 3 Rivers Lucerne Ltd, and after no objections were received, it came into force on the date of application, 15 January 2007.
Scope and Application
The Tariff Concession Instrument No. 0700712, issued under the Customs Act 1901, applies to individuals or entities seeking a tariff concession order (TCO) for specific goods, in this case certain long fibre lucerne dryers, from the Chief Executive Officer of Customs. The instrument facilitates a reduction in customs duty for these goods, aligning with the provisions of the Customs Act 1901 and the Customs Tariff Act 1995. The instrument was made following an application by 3 Rivers Lucerne Ltd, and the decision to grant the TCO was based on the absence of substitutable goods produced in Australia at the time of the application. The TCO, which came into effect on 15 January 2007, grants these specific long fibre lucerne dryers a duty-free status under item 50 of Schedule 4 to the Tariff, whereas the general rate of duty on such goods is 5%. The instrument ensures that the application of the TCO does not affect existing rights or impose liabilities on any person other than the Commonwealth, and it allows importers to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0700712, issued under the Customs Act 1901 (sections 269C, 269F, 269P(3)), provides a tariff concession for certain long fibre lucerne dryers, resulting in a zero rate of customs duty instead of the general rate of 5%. This instrument follows an application by 3 Rivers Lucerne Ltd and was issued on 30 March 2007 by the Chief Executive Officer of Customs (CEO) after determining that no substitutable goods were produced in Australia, as per section 269C of the Act.
The Act imposes specific obligations on the CEO, including the requirement to publish a notice in the Gazette, as per section 269K(1), inviting submissions from interested parties regarding the proposed tariff concession. If any submissions are received, the CEO must consider them before making a decision. In this case, no submissions were received, leading to the issuance of the TCO on 30 March 2007. The TCO applies retroactively to the date of the application, 15 January 2007, under subsection 269S(1) of the Act, ensuring that the concession is effective from that date without disadvantaging any party's rights as at the date of registration.
The legislation also provides for potential financial benefits for importers. Importers of the affected goods can apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. This provision ensures that importers who have already paid higher duties can reclaim the difference. Importantly, the TCO does not impose any liabilities on any person, safeguarding the interests of all parties involved.
Failure to comply with the provisions of the Customs Act 1901 or the associated regulations could lead to various penalties. While the specific penalties are not detailed in the explanatory statement, breaches of customs laws typically result in substantial fines and potential criminal charges. The exact penalties depend on the nature and severity of the breach, with potential maximum penalties available under other sections of the Act and related legislation. It is essential for all parties to adhere strictly to the requirements set out in the Act to avoid any legal repercussions.