EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824134
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.
Laminex Group applied for a TCO in respect of certain mdf production plant parts on 31 July 2008.
Instrument
TCO No 0824134 was made on 24 October 2008. It declares that those certain mdf production plant 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. 0824134 is taken to have come into force on 31 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 Tariff Concession Instrument No. 0824134 was enacted in 2008 under the Customs Act 1901 to address the need for tariff concessions on specific goods that are not produced domestically, thereby encouraging the import of these goods and potentially lowering costs for businesses and consumers. This instrument was introduced to facilitate the application process for tariff concessions, ensuring that the Chief Executive Officer of Customs could effectively assess and approve applications that meet the specified criteria. The primary objective, as outlined in the Act, is to provide a streamlined mechanism for reducing customs duties on imported goods where no substitutable Australian-made alternatives exist.
The instrument was enacted by the relevant authorities within the Australian government to implement the provisions of the Customs Act 1901, specifically targeting the facilitation of tariff concessions for imported goods. The policy objective is to support economic efficiency by allowing the import of goods that are not domestically produced, thereby potentially lowering costs for businesses and consumers while ensuring that the application process is transparent and accountable.
Scope and Application
The Tariff Concession Instrument No. 0824134 under the Customs Act 1901 applies to the goods specified in the instrument, in this case, certain MDF production plant parts. It targets importers who seek to benefit from reduced customs duty rates for these specific goods. The Act extends to the Commonwealth jurisdiction, ensuring that the concessions provided are consistent with national trade policies and objectives. The instrument allows for the application of a lower rate of customs duty on the specified goods, provided that no substitutable goods are produced in Australia, thereby facilitating the import of these goods under more favourable tariff conditions. Exclusions or exemptions from this concession are outlined in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application of the TCO is further governed by subordinate instruments and regulations, which may specify additional conditions or criteria for eligibility. The instrument effectively came into force on 31 July 2008, the date the application was lodged, and does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The main sections of the Customs Act 1901 that pertain to Tariff Concession Orders (TCOs) include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application does not concern goods specified in section 269SJ, which are ineligible for a TCO, the CEO must evaluate whether it meets the core criteria set out in section 269C. This provision stipulates that an application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions of key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P respectively. If the CEO is satisfied that the application meets the core criteria, they are required under subsection 269P(3) to issue a written order, which is the TCO, specifying the applicable tariff concession.
The obligations and requirements imposed by the Customs Act 1901 on the parties involved are multifaceted. For applicants, the primary requirement is to submit a valid application to the CEO, ensuring it pertains to goods that are not specified in section 269SJ. The CEO, upon receiving an application, must evaluate whether it meets the core criteria outlined in section 269C. This includes determining that no substitutable goods were produced in Australia on the day the application was lodged. If the application satisfies these criteria, the CEO must then issue a TCO as per subsection 269P(3). Additionally, the CEO is mandated by subsection 269K(1) to publish a notice in the Gazette inviting any interested parties to submit objections or submissions regarding the TCO application. This ensures transparency and provides an opportunity for public consultation.
Failure to comply with the provisions of the Customs Act 1901 concerning Tariff Concession Orders can result in both civil and criminal consequences. Although the Act does not explicitly state the penalties for breaches, it is understood that any non-compliance could potentially lead to legal action. The CEO has the authority to enforce the provisions of the Act, which could include taking legal action against those who violate the terms of a TCO or the application process. The maximum penalties for such breaches would depend on the specific nature of the offence, but they could include fines or other penalties as prescribed by law.
In summary, the Customs Act 1901 outlines a structured process for the issuance of Tariff Concession Orders, starting with the submission of an application by a person, followed by a thorough evaluation by the CEO to ensure the application meets the core criteria. If the criteria are met, a TCO is issued, and the rights of importers are subsequently affected. The Act also mandates the publication of notices in the Gazette to allow for public consultation. Failure to comply with the Act's provisions could lead to civil or criminal consequences, although specific penalties are not detailed in the Act itself.