EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0948746
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.
Consolidated Veneers applied for a TCO in respect of certain edgebanding on 15 December 2009.
Instrument
TCO No 0948746 was made on 5 March 2010. It declares that those certain edgebanding 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. 0948746 is taken to have come into force on 15 December 2009.
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, provides a framework for the regulation of imports and exports, including the imposition of customs duties. One of the mechanisms under this Act is the Tariff Concession Order (TCO), which can be made by the Chief Executive Officer of Customs to apply a lower rate of customs duty on specified goods. This concession is intended to benefit importers and the broader economy by reducing the cost of certain imported goods. The Tariff Concession Instrument No. 0948746, made in 2010, is an example of such an order. This specific instrument was introduced in response to an application from Consolidated Veneers for tariff concessions on certain edgebanding products. The instrument declares that these products are subject to a tariff concession, effectively setting their duty rate at zero, provided no substitutable goods are produced in Australia. This legislative measure aims to facilitate trade by reducing import costs, thereby supporting businesses that rely on imported materials.
Scope and Application
The Tariff Concession Instrument No. 0948746, made under the Customs Act 1901, pertains to the application of tariff concessions for specific goods, namely certain edgebanding, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995. This instrument applies to Consolidated Veneers, the entity that applied for the tariff concession order (TCO), and to any person or entity importing the specified edgebanding. The scope of the Act extends to all goods that are subject to the Customs Act 1901, and the geographic reach encompasses the entire Commonwealth of Australia. The Act mandates that a TCO application must meet core criteria, which includes ensuring that no substitutable goods are produced in Australia at the time the application is lodged. Exemptions or exclusions apply to goods specified in section 269SJ of the Act, which are not eligible for a TCO. The TCO does not affect any rights or liabilities of persons other than the Commonwealth and is effective from the date the application was lodged, 15 December 2009, in this instance. The application of the TCO can be extended or restricted through subordinate instruments as necessary.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Order No. 0948746, revolve around the provisions for applying and granting Tariff Concession Orders (TCOs) (sections 269C, 269F, 269S, 269SJ, and 269P). A TCO is a written order made by the Chief Executive Officer (CEO) of Customs, declaring that certain specified goods are subject to a lower rate of customs duty. The application for a TCO can be made by any person under section 269F, provided the goods are not specified in section 269SJ as ineligible. The CEO must determine if the application meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If satisfied, the CEO must issue a TCO, as outlined in section 269P(3).
The Act imposes specific obligations on both applicants and the CEO. Applicants must ensure their TCO applications meet the core criteria and provide sufficient information to demonstrate that no substitutable goods were produced in Australia. The CEO has the responsibility to review the application, assess whether the core criteria are met, and make a written order if the criteria are satisfied. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties on the proposed TCO (subsection 269K(1)).
Breach of the provisions within the Customs Act 1901 can result in significant legal consequences. For instance, any person who knowingly makes a false statement or omission in an application for a TCO may face civil or criminal penalties. The maximum penalty for a civil breach could involve fines, while criminal breaches might result in imprisonment, depending on the severity and intent behind the breach. Such penalties are designed to uphold the integrity of the tariff concession process and ensure compliance with the Act's requirements.