EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706047
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.
Hyne and Son Pty Ltd applied for a TCO in respect of certain timber sawline positioning systems on 26 April 2007.
Instrument
TCO No 0706047 was made on 6 July 2007. It declares that those certain timber sawline positioning systems 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 0%.
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. 0706047 is taken to have come into force on 26 April 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 Customs Act 1901, enacted by the Parliament of Australia, provides a legislative framework for the administration of customs duties and related matters. Part XVA of the Act introduces the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs, offering a lower rate of customs duty on specified goods. This mechanism was designed to address the issue of ensuring that Australian industries remain competitive by reducing the cost of imported goods that do not have local substitutes, thereby encouraging the import of goods that are necessary for Australian businesses but not produced domestically. In line with the policy objective of fostering economic efficiency and supporting industry competitiveness, Tariff Concession Instrument No. 0706047 was introduced on 6 July 2007, granting a zero percent duty rate on certain timber sawline positioning systems, effective from 26 April 2007, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0706047, established under Part XVA of the Customs Act 1901, applies to the application of tariff concessions on specific goods, in this case certain timber sawline positioning systems. The Act allows for the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) that effectively reduces the rate of customs duty on the specified goods, provided certain criteria are met. The application for a TCO is governed by section 269F of the Act, where an application is assessed against the core criteria outlined in section 269C, ensuring that no substitutable goods are produced in Australia. This instrument applies to any person or entity that imports or deals with the specified goods, thereby directly affecting their customs duty obligations. The geographic reach of this Act is national, as it operates within the framework of the Australian Customs Act and the Customs Tariff Act 1995. Any exclusions or exemptions are detailed in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, as indicated by the process of publishing notices in the Gazette and the requirement for public submissions, though in this instance, no submissions were received.
Key Provisions
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0706047, introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (section 269F). These orders provide a lower rate of customs duty on specified goods. The CEO is required to consider applications for TCOs and must decide whether they meet the core criteria set out in section 269C, which involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This definition of 'substitutable goods' is provided in section 269D, 'ordinary course of business' in section 269E, and is further clarified in section 269P(3).
In this case, Hyne and Son Pty Ltd applied for a TCO concerning certain timber sawline positioning systems on 26 April 2007. The CEO was satisfied that the application met the core criteria and subsequently issued TCO No. 0706047 on 6 July 2007. This order declared that the specified goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, reducing the duty from the general rate of 5% to 0%. The TCO came into force on 26 April 2007, the date the application was lodged, and it does not affect the rights of any person or impose any liabilities on them in respect of actions taken prior to the TCO's registration.
The CEO is obligated to 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)). In this instance, no submissions were received in response to the invitation. The Act also mandates that TCOs do not disadvantage any person other than the Commonwealth or impose liabilities on such individuals in relation to actions taken before the TCO's registration. Importers, however, can benefit from this TCO by applying for a refund of duty on goods imported since the TCO came into effect under paragraph 126(1)(r) of the Regulations.
The legislation includes provisions for offences and penalties, although specific details on maximum penalties are not provided in the explanatory statement. Generally, breaches of the Customs Act 1901 can result in civil and criminal penalties, including fines and imprisonment, depending on the severity of the offence and the specific provisions violated. The Act aims to ensure compliance and the proper application of customs duties, with potential consequences for non-compliance.