EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721744
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.
Carter Holt Harvey Woodproducts Pty Limited applied for a TCO in respect of certain wood flake dryer parts on 18 December 2007.
Instrument
TCO No 0721744 was made on 07 March 2008. It declares that those certain wood flake dryer parts 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. 0721744 is taken to have come into force on 18 December 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. 0721744 was enacted in 2008 under the Customs Act 1901 to provide a concessional tariff rate for specific goods that were not produced in Australia and for which there were no substitutable goods. The instrument was introduced to address the need for reduced customs duties on imported goods that were essential for specific industries but could not be locally manufactured. The Australian Government, through the Chief Executive Officer of Customs, established this scheme to ensure that Australian businesses could access necessary goods at a reduced cost, thus supporting economic efficiency and competitiveness. The policy objective behind this instrument is to facilitate the import of goods that are critical for production but not manufactured domestically, thereby ensuring that Australian industries can operate effectively without undue financial burden.
Scope and Application
The Tariff Concession Instrument No. 0721744 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been granted. This instrument pertains to certain wood flake dryer parts for which Carter Holt Harvey Woodproducts Pty Limited applied and was granted a concession on 18 December 2007. The application process and the subsequent order were governed by the criteria outlined in section 269C and 269P of the Act, which mandate that a TCO can be issued if the goods in question are not substitutable by any goods produced in Australia. The instrument, which came into force on the date of the application, grants a zero duty rate for these specified parts, which otherwise attract a general duty rate of 5%. The application and subsequent issuance of the TCO adhered to the requirement of publishing a notice in the Gazette to allow for any objections, none of which were received. The TCO does not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth, ensuring that it operates without disadvantaging existing stakeholders while providing benefit to importers by allowing duty refunds.
Key Provisions
The Tariff Concession Instrument No. 0721744, made under section 269P of the Customs Act 1901 (the Act), is a specific order that applies a concessional rate of customs duty on certain goods. Section 269P(3) of the Act mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, the CEO must issue a written order declaring that the goods in question are subject to the concessional duty. In this case, Instrument No. 0721744, made on 7 March 2008, specifies that certain wood flake dryer parts are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general 5% rate.
The obligations imposed by the Act on the parties involved are clearly defined. Firstly, any person can apply to the CEO for a TCO under section 269F, provided the goods in question are not those specified in section 269SJ of the Act, which are ineligible for tariff concessions. The CEO must then assess whether the application meets the core criteria outlined in section 269C. This requires the CEO to determine if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B further clarifies that 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are defined in sections 269D, 269E, and 269F respectively. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons. In this instance, the CEO received no submissions in response to the published notice.
The Act also outlines potential consequences for breaches or non-compliance. Although the specific penalties are not detailed in the Explanatory Statement, the Customs Act 1901 generally provides for a range of penalties for breaches, including fines and imprisonment for more serious violations. The Act ensures that the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the TCO is deemed to have come into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth, nor does it affect the rights of any person as at the date of registration concerning actions taken prior to the registration date.