EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802479
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.
Drouin West Timber Sales Pty Ltd applied for a TCO in respect of certain drum chippers on 12 February 2008.
Instrument
TCO No 0802479 was made on 18 April 2008. It declares that those certain drum chippers 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. 0802479 is taken to have come into force on 12 February 2008.
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 Commonwealth Parliament, provides a framework for the regulation of customs duties and related matters. The Act includes provisions for the creation of Tariff Concession Orders (TCOs) under Part XVA, which aim to offer tariff concessions on certain goods that are not produced in Australia. These concessions are intended to promote the importation of goods that are necessary for Australian industry or consumers but are not domestically produced. The Explanatory Statement for Tariff Concession Instrument No. 0802479 outlines the process by which Drouin West Timber Sales Pty Ltd applied for and received a TCO for certain drum chippers. The instrument was enacted to address the gap in domestic production of these specific goods, ensuring that they are subject to a lower rate of customs duty, thereby facilitating their availability in the Australian market. The policy objective is to support industry needs and consumer access to certain goods by reducing the financial burden of customs duties on these imports.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) which apply reduced rates of customs duty on certain goods. This Act applies to any person or entity seeking to import goods that are eligible for tariff concessions, provided the goods are not specified in section 269SJ of the Act as ineligible for such concessions. The Act's jurisdictional reach is national, as it operates under the authority of the Commonwealth of Australia. A TCO application is assessed against core criteria set out in section 269C of the Act, which requires the CEO to determine if the goods in question have no substitutable equivalent produced in Australia at the time the application was lodged. The instrument, Tariff Concession Instrument No. 0802479, made on 18 April 2008, is an example of how the Act extends its application through subordinate instruments, providing specific tariff relief on certain drum chippers by applying a duty rate of free, down from the general rate of 5%. Importantly, this TCO does not impose any new liabilities and does not affect any pre-existing rights of individuals or entities except to confer the benefit of duty refunds to importers under Regulation 126(1)(r).
Key Provisions
The main operative sections of this legislation focus on the creation and application of Tariff Concession Orders (TCOs) under the Customs Act 1901 (sections 269C, 269B, 269D, 269E, 269F, and 269P). Section 269F allows an individual or entity to apply for a TCO if certain conditions are met. The Chief Executive Officer of Customs (CEO) must then decide if the application meets the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO must issue a written order under section 269P(3) that specifies the goods to which the TCO applies. For example, TCO No 0802479 was issued for certain drum chippers, declaring them to be subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty-free status.
The obligations imposed by the Act primarily rest on the CEO to assess applications for TCOs and to publish notices in the Gazette inviting submissions from any interested parties (subsection 269K(1)). The CEO must also ensure that the TCO does not adversely affect the rights of any person, other than the Commonwealth, as at the date of registration (subsection 269S(1)). In the case of TCO No 0802479, the CEO did not receive any submissions opposing the order, and the TCO came into effect on 12 February 2008, the day the application was lodged. This means that the rights of importers are beneficially affected, as they can apply for refunds of duty on goods imported since the TCO's effective date.
Breaching the conditions or misrepresenting information in an application for a TCO can have significant consequences. Although the Act does not explicitly detail offences or penalties for such breaches, the overall legal framework under which it operates, including the Customs Act 1901, allows for enforcement actions. For example, section 186 of the Customs Act imposes penalties for making false or misleading statements in connection with customs matters, which can include fines or imprisonment. Moreover, any failure to comply with the terms of a TCO or to apply for a refund where entitled could lead to further administrative or legal repercussions under relevant customs legislation.