EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1119939
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.
Boral Australian Gypsum Ltd applied for a TCO in respect of certain dryers on 21 June 2011.
Instrument
TCO No 1119939 was made on 05 September 2011. It declares that those certain dryers 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. 1119939 is taken to have come into force on 21 June 2011.
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. 1119939, enacted in 2011 under the Customs Act 1901, was introduced to provide a specific solution for the issue of applying lower rates of customs duty to certain goods, in this case, certain dryers. This legislative instrument was created in response to an application by Boral Australian Gypsum Ltd to the Chief Executive Officer of Customs, seeking tariff concessions for the specified goods. The Customs Act 1901, specifically Part XVA, outlines the process for the creation of Tariff Concession Orders (TCOs) by the CEO, which allows for the application of a lower rate of customs duty to goods not produced in Australia in the ordinary course of business. The policy objective of this legislation is to support the importation of goods that cannot be readily produced domestically, thus benefiting importers by reducing the duty payable on such goods.
The instrument was made effective on the date the application was lodged, 21 June 2011, and no objections were received in response to the published notice inviting submissions. The concession does not impose any liabilities on persons other than the Commonwealth and does not affect any pre-existing rights adversely. Importers of the specified goods are entitled to apply for a refund of duty paid on imports from the date the TCO was deemed to come into force, thereby providing a clear benefit to those affected by the new tariff arrangement.
Scope and Application
The Tariff Concession Instrument No. 1119939, made under the Customs Act 1901, pertains to the application of a Tariff Concession Order (TCO) in respect of certain dryers. The legislation applies to entities or individuals who import the specified dryers, aiming to provide tariff concessions by reducing or eliminating customs duty on these goods. The Act operates at a Commonwealth level, providing a framework through which the Chief Executive Officer of Customs can make TCOs that affect the duty rates for specified goods. The scope of the Act excludes goods listed in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, though no such instruments are specified in the explanatory statement. The TCO in question was made effective from the date the application was lodged, 21 June 2011, and it does not disadvantage any person other than the Commonwealth or impose any new liabilities on such persons.
Key Provisions
The main operative sections of the Customs Act 1901, specifically in the context of Tariff Concession Orders (TCOs), revolve around the application process and the criteria for approval. Section 269F allows a person to apply for a TCO, while Section 269C establishes the core criteria that the application must meet for approval. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they are required to make a written order under Section 269P(3), specifying the applicable duty on the goods in question.
The obligations imposed by the Act on the parties involved include the duty of the CEO to assess applications for TCOs against the core criteria (Section 269C). The CEO must ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, under Section 269K(1), the CEO is required to publish a notice in the Gazette, inviting submissions from any interested parties who believe the TCO should not be granted. This ensures transparency and provides an opportunity for any objections to be raised.
In terms of breaches and consequences, the Customs Act 1901 does not explicitly outline specific offences or penalties related to the failure to comply with TCO requirements. However, general compliance with customs regulations and the associated penalties for non-compliance under the Act may apply. The penalties for breaches of customs regulations can include fines and, in more serious cases, imprisonment, reflecting the severity of the breach and the intent behind it.
The Tariff Concession Order No. 1119939, which was made on 5 September 2011, is an example of how the Act functions in practice. This particular TCO was granted for certain dryers, reducing their duty from a general rate of 5% to free. The order came into effect on 21 June 2011, the date the application was lodged, and it does not affect the rights of any person as at the date of registration, nor does it impose any liabilities. This order benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force.