EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710733
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.
Farm Tech Machinery Pty Ltd applied for a TCO in respect of a certain forage baler-wrapper on 06 July 2007.
Instrument
TCO No 0710733 was made on 14 September 2007. It declares that those certain forage baler-wrappers 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. 0710733 is taken to have come into force on 06 July 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 Australian Parliament, established a framework for managing customs duties and tariffs on imported goods. It introduced a mechanism through which Tariff Concession Orders (TCOs) could be made, allowing for a lower rate of customs duty on specified goods. This was particularly aimed at addressing the need for tariff concessions to promote trade and reduce costs for certain goods that do not have substitutable products produced domestically. The Tariff Concession Instrument No. 0710733, made in 2007, is an example of this mechanism in action, providing tariff concessions for certain forage baler-wrappers. The Chief Executive Officer of Customs (CEO) is tasked with deciding whether to grant a TCO based on whether the goods are substitutable by products manufactured in Australia. The policy objective is to ensure that imports are facilitated without disadvantaging domestic producers or imposing new liabilities, while potentially benefiting importers through duty refunds.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply to goods for which an applicant has applied, provided that the goods do not fall under the restricted category outlined in section 269SJ of the Act. The process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F. If the CEO is satisfied that the application meets the criteria, a TCO is issued, granting a lower rate of customs duty on the specified goods. For instance, TCO No. 0710733, issued on 14 September 2007, granted a tariff concession on certain forage baler-wrappers, reducing the duty rate from 5% to free. The geographic reach of the Act applies to all goods imported into Australia, with the TCO affecting the rights of importers from the date the application was lodged, as per subsection 269S(1). No submissions were received in opposition to the TCO, and the order does not impose any liabilities on any person other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0710733, made under section 269F of the Customs Act 1901, establishes a tariff concession order (TCO) for certain forage baler-wrappers, effective from 06 July 2007 (subsection 269S(1)). This TCO, declared by the Chief Executive Officer of Customs (CEO) on 14 September 2007, stipulates that these specific forage baler-wrappers will be subject to a 5% duty rate, down from the general rate of duty (section 269P(3)). The TCO was enacted because the CEO was satisfied that no substitutable goods were produced in Australia, aligning with the core criteria outlined in section 269C.
The Act imposes several obligations on the parties involved. The CEO must ensure that the TCO application meets the core criteria, which include verifying that no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application, although no submissions were received in this case (subsection 269K(1)). Additionally, the Act ensures that the TCO does not adversely affect the rights of any person, other than the Commonwealth, as at the date of registration (subsection 269S(3)).
Breaching the provisions of the Customs Act 1901, particularly in relation to the making of a TCO, could lead to various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Act generally could result in civil or criminal penalties. For instance, under section 270 of the Act, the maximum penalty for knowingly or recklessly making a false statement or representation in an application for a TCO can be substantial. The precise penalties would depend on the nature and severity of the breach, but they could include fines or imprisonment, reflecting the seriousness of non-compliance with the Act's requirements.