EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1011497
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.
Scandinavian Forestry And Engineering applied for a TCO in respect of certain wood chippers on 01 March 2010.
Instrument
TCO No 1011497 was made on 21 May 2010. It declares that those certain wood 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. 1011497 is taken to have come into force on 01 March 2010.
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, through its Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 1011497 was enacted to address the specific issue of applying lower rates of customs duty to goods that are subject to a TCO. This instrument was introduced in response to an application by Scandinavian Forestry And Engineering for a TCO on certain wood chippers, which was lodged on 1 March 2010. The instrument was issued on 21 May 2010 and came into force on the date the application was lodged. The primary objective of this legislation is to provide tariff relief by making a TCO for the specified wood chippers, thereby setting the rate of duty for these goods at free, as no substitutable goods were being produced in Australia at the time. The instrument ensures that no existing rights or liabilities are adversely affected for those other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1011497 under the Customs Act 1901 applies to certain wood chippers for which Scandinavian Forestry And Engineering applied for a Tariff Concession Order (TCO). The Act applies to any person or entity seeking to import goods into Australia and the goods themselves, provided they meet specific criteria set out in the Act. The Act's jurisdiction extends nationally, as it operates under the Commonwealth's customs regime. The TCO mechanism is designed to provide a lower rate of customs duty on goods if certain conditions are met, specifically if no substitutable goods are produced in Australia in the ordinary course of business at the time of application. The CEO of Customs is responsible for assessing applications and making orders under this scheme. Notably, the application process and the effects of the TCO do not disadvantage any person other than the Commonwealth and do not impose new liabilities on any person. Importers can benefit from the TCO by applying for a refund of duty on goods imported since the effective date of the order. The TCO does not retroactively affect rights or impose liabilities for actions taken before its registration date.
Key Provisions
The Customs Act 1901, as supplemented by Tariff Concession Orders (TCOs), allows for lower rates of customs duty on certain goods, provided they meet specific criteria. Section 269F allows individuals or entities to apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the CEO is satisfied that the application is valid and not in respect of goods specified in section 269SJ, they must assess whether the application meets the core criteria outlined in section 269C. This requires confirmation that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B and related sections further define terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods."
The obligations imposed by the Act on applicants include providing detailed and accurate information about the goods in question, ensuring that the application is not for goods that cannot be subject to a TCO as per section 269SJ, and adhering to the conditions set out in section 269C. The CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted, as stipulated in subsection 269K(1). Once the CEO is satisfied that the application meets all the criteria, they must issue a written TCO, as per subsection 269P(3). This order specifies that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Failure to comply with the requirements of the Customs Act 1901, or misrepresentation of facts in a TCO application, can lead to various civil and criminal consequences. While the Act does not explicitly outline penalties for breaches, general provisions under Australian law may apply. These can include fines, imprisonment, or both, depending on the severity of the breach. For instance, knowingly providing false information in an application could result in penalties under section 3AA of the Crimes Act 1914, which imposes fines of up to 120 penalty units or imprisonment for up to two years, or both, for each offence. Additionally, any failure to comply with the terms of a TCO could lead to financial penalties or other sanctions as determined by the relevant authorities.