EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715802
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.
Pan Spraybooths & Electrical Pty Ltd applied for a TCO in respect of certain infrared dryers on 20 September 2007.
Instrument
TCO No 0715802 was made on 30 November 2007. It declares that those certain infrared 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. 0715802 is taken to have come into force on 20 September 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 was enacted to provide a structured framework for the administration of customs and excise duties, and it includes provisions for Tariff Concession Orders (TCOs) under Part XVA. The Act was introduced to address the need for a system that allows for tariff reductions on specific goods under certain conditions. The Tariff Concession Instrument No. 0715802, enacted in 2007, is an example of how this framework operates in practice. It was developed in response to an application by Pan Spraybooths & Electrical Pty Ltd for a TCO on certain infrared dryers. The instrument was issued by the Chief Executive Officer of Customs (CEO) following a determination that no substitutable goods were being produced in Australia, thereby meeting the core criteria for a concession. The CEO, acting under the authority of the Customs Act, made this order to provide tariff relief, which is intended to benefit importers by reducing the duty on these specific goods from the general rate of 5% to free. The CEO followed the legislative requirement to publish a notice in the Gazette, inviting submissions on the application, though none were received. The TCO came into effect on the date the application was lodged, and it ensures that no person other than the Commonwealth is disadvantaged or incurs liabilities for actions taken prior to the TCO's registration.
Scope and Application
The Tariff Concession Instrument No. 0715802 under the Customs Act 1901 applies to specific infrared dryers as the subject of a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs. This legislation is designed to provide a lower rate of customs duty on the specified goods if certain criteria are met, primarily ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the date the application for the TCO was lodged. The application process allows any person to apply for a TCO, provided the goods in question are not those specified in section 269SJ of the Act, which excludes certain goods from eligibility. The geographic reach of this legislation is federal, applying across Australia as per the provisions of the Customs Act 1901. Additionally, the Act allows for the extension and restriction of its application through subordinate instruments, ensuring that the scheme remains adaptable to changing economic and industrial conditions. The TCO does not disadvantage any person or impose liabilities on anyone except the Commonwealth, and it does not affect the rights of individuals as at the date of registration for actions taken before this date.
Key Provisions
The Customs Act 1901, as amended, includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) (sections 269F, 269C, 269B, 269P). An application can be made for a TCO by any person to the CEO, provided the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must determine if the application meets the core criteria, specifically, whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If satisfied, the CEO is required to issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods (section 269P(3)). For example, Tariff Concession Order No. 0715802 applies to certain infrared dryers, reducing the duty rate from 5% to free.
The Act imposes certain obligations on the CEO, including the requirement to publish a notice in the Gazette inviting submissions from any person who might object to the TCO being made (subsection 269K(1)). In the case of Tariff Concession Order No. 0715802, no submissions were received. Furthermore, the Act specifies that a TCO comes into effect on the day the application was lodged (subsection 269S(1)). This means that for Tariff Concession Order No. 0715802, the concession came into force on 20 September 2007. The Act also ensures that the TCO does not affect the rights of any person, except the Commonwealth, to their disadvantage or impose liabilities for actions taken before the TCO's registration. Instead, it benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Failure to comply with the requirements set out in the Customs Act 1901 may lead to various consequences, although specific penalties are not detailed in the explanatory statement. Breaches of the Act's provisions could potentially result in civil or criminal consequences, depending on the nature and severity of the breach. For example, knowingly making false statements in an application for a TCO could lead to criminal charges, while failure to declare goods correctly could result in civil penalties. However, the exact penalties are not specified within the explanatory statement provided and would need to be referred to in the relevant sections of the Act or associated regulations.