EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0819770
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.
Australian Wood Panels Pty Ltd applied for a TCO in respect of certain plywood on 17 July 2008.
Instrument
TCO No 0819770 was made on 10 October 2008. It declares that those certain plywood 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. 0819770 is taken to have come into force on 17 July 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 Australian Parliament, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specific goods. This legislative instrument was introduced to address the gap in providing relief for goods where no substitutable alternatives are produced domestically. The aim is to ensure that Australian consumers and businesses can access goods at reduced rates where no local production exists that could substitute for imported goods. The Tariff Concession Instrument No. 0819770, made on 10 October 2008, is an example of this process, declaring that certain plywood is subject to a TCO, thereby reducing the duty rate from 5% to free, effective from the date the application was lodged, 17 July 2008. This particular TCO was made without any objections from the public, as no submissions were received in response to the invitation for comments published by the CEO.
Scope and Application
The Tariff Concession Instrument No. 0819770, under the Customs Act 1901, applies to goods specified in a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO). The instrument focuses on providing a lower rate of customs duty on certain plywood, as requested by Australian Wood Panels Pty Ltd, and declared under item 50 of Schedule 4 to the Customs Tariff Act 1995. The application of this instrument is limited to goods that do not have substitutable equivalents produced in Australia, as per the core criteria outlined in section 269C of the Act. The TCO applies nationally and its provisions are effective from the date the application was lodged, 17 July 2008, without retroactive effect on pre-existing rights or liabilities. Importantly, the instrument does not exempt or exclude any specific entities or industries from its scope, although it does exclude goods that cannot be subject to a TCO as per section 269SJ of the Act. The instrument’s application can be extended or modified through subordinate instruments, though this particular TCO does not impose any new liabilities and provides beneficial rights to importers who can apply for duty refunds.
Key Provisions
The Tariff Concession Order (TCO) No. 0819770, made under the Customs Act 1901, primarily serves to reduce the customs duty on certain plywood products, as detailed in item 50 of Schedule 4 to the Customs Tariff Act 1995. Specifically, Section 269F allows individuals or entities to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the application meets the core criteria set out in Section 269C, which includes the absence of substitutable goods produced in Australia on the application date, the CEO must make a written order. This order declares that the specified goods are subject to a prescribed rate of duty, which in this case is free instead of the general 5% rate.
The obligations under this legislation are twofold. Firstly, applicants must ensure their requests meet the core criteria as outlined in the Act. This involves demonstrating that no substitutable goods are produced in Australia on the date of the application, which is defined in Sections 269D and 269E. Secondly, the CEO has an obligation to process the application in a timely manner and publish a notice in the Gazette, inviting submissions from interested parties. This transparency measure is mandated by Subsection 269K(1). Additionally, the CEO must ensure that the rights of existing importers are not adversely affected by the TCO, as stipulated by Subsection 269S(1).
There are no explicit offences or penalties stated in the explanatory statement for failing to comply with the provisions of TCO No. 0819770. However, general compliance with the Customs Act 1901 and associated regulations is expected. Breaches of the Customs Act can result in civil or criminal penalties, including fines and imprisonment, depending on the severity and intent behind the violation. The specific penalties would be determined by the courts based on the applicable sections of the Act and any relevant case law.