EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719754
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.
Koppers Arch Wood Protection Pty Ltd applied for a TCO in respect of certain wood dipping machines on 20 November 2007.
Instrument
TCO No 0719754 was made on 1 February 2008. It declares that those certain wood dipping machines 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. 0719754 is taken to have come into force on 20 November 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. 0719754, enacted on 1 February 2008, is a measure introduced under the Customs Act 1901 to address the specific need for tariff concessions on certain imported goods. This instrument was established to provide a lower rate of customs duty on specified goods, in this case, certain wood dipping machines, where the Chief Executive Officer of Customs determines that no substitutable goods are produced in Australia. The primary policy objective is to facilitate the import of goods that are essential for business operations and for which there is no local alternative, thereby supporting industries that rely on imported components for their manufacturing processes. This legislative instrument ensures that the tariff concessions are applied retroactively to the date the application was lodged, benefiting importers by potentially allowing them to claim a refund of duty paid on these goods since that date. The process involves a review of applications against specific criteria, including the production of substitutable goods in Australia, to ensure that the tariff concessions are granted only where there is a genuine need.
Scope and Application
The Customs Act 1901, particularly through its Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders, as exemplified by TCO No. 0719754, apply to specific goods that are subject to a lower rate of customs duty as determined by the CEO. This legislation primarily concerns individuals or entities applying for tariff concessions on imported goods, ensuring that such applications are assessed against core criteria, including the absence of substitutable goods produced in Australia. The TCO mechanism is designed to provide relief on customs duties for certain goods, such as the wood dipping machines in the case of Koppers Arch Wood Protection Pty Ltd, by reducing the duty rate from the general 5% to free. The geographic reach of this legislation is national, as it operates under the Commonwealth's authority, with the CEO acting as the central authority for approving TCOs. Any person who believes that a TCO should not be made can submit objections, though in this case, no submissions were received. The commencement of the TCO aligns with the date of the application, ensuring that rights and liabilities are managed in accordance with the timing of the application process.
Key Provisions
The Tariff Concession Order No. 0719754 under the Customs Act 1901 establishes a concession on the customs duty for certain wood dipping machines. This order was made by the Chief Executive Officer of Customs (CEO) following an application by Koppers Arch Wood Protection Pty Ltd on 20 November 2007, and it came into effect on the same date (sections 269F, 269S(1), 269SJ). The order declares that these wood dipping machines are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a reduction of the customs duty from the general rate of 5% to free duty (section 269P(3)). This means that importers of these machines will not be required to pay any customs duty on them.
The Act imposes specific obligations on the parties involved. When an application for a Tariff Concession Order is lodged, the CEO must first determine whether the goods in question are eligible under the Act (section 269F). The CEO must ensure that the goods are not specified in section 269SJ, which lists those that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order (section 269C). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, no submissions were received.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations may result in various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can lead to civil or criminal penalties. For instance, providing false information in an application could lead to fines or imprisonment. The specific penalties would depend on the nature and severity of the breach, as outlined in the relevant sections of the Customs Act and the Customs Regulations 1995. Importers must ensure they adhere to the requirements of the TCO and any other applicable customs laws to avoid any potential penalties or liabilities.