EXPLANATORY STATEMENT
Tariff Concessions Revocation Instrument 11/2007
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 and revoked 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 sections 269C and 269P of the Act, a TCO will be made if the application for the TCO meets the core criteria, that is, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
Subsection 269SD(2A) of the Act provides that if, because of an amendment of the Customs Tariff Act 1995, the CEO is satisfied that the tariff classification that is stated in a TCO to apply to the goods the subject of the TCO will not, with effect from a particular day, apply to those goods, the CEO must:
− make an order revoking the TCO with effect from that day; and
− make a new TCO in respect of the goods with effect from that day.
Instrument
Tariff Concessions Revocation Instrument Number 11/2007 was made on
3 January 2007. This instrument revokes 0615603 of classification 8520.90.00 and makes new TCO 0614808 of classification 8519.81.90. The instruments reflect changes to the Customs Tariff Act 1995 contained in the Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006, which took effect from 1 January 2007.
Consultation
No consultation was undertaken since the change is minor or machinery in nature and does not substantially alter existing arrangements.
Commencement
Subsection 269SD(2A) provides that the orders revoking the TCOs have effect from the day that the CEO is satisfied that the tariff classifications stated to apply to the goods the subject of the TCOs will not apply to those goods. Further, the new TCOs have effect from that day. Tariff Concessions Revocation Instrument Number 11/2007 revokes TCO 0615603 and makes new TCO’s 0614808 in its place, with effect from 1 January 2007.
Overview
The Tariff Concessions Revocation Instrument 11/2007, enacted on 3 January 2007, serves to address the need for tariff adjustments arising from changes in the Customs Tariff Act 1995. This instrument operates under the Customs Act 1901, enabling the Chief Executive Officer of Customs to revoke and issue new Tariff Concession Orders (TCO) in response to amendments in tariff classifications. The underlying problem it addresses is the requirement to ensure that tariff concessions align with updated tariff classifications, thereby maintaining the integrity of the tariff concession scheme. The instrument was made without consultation due to its minor nature and its alignment with existing arrangements. The objective of this instrument is to ensure that the tariff concessions remain applicable and accurate, reflecting the changes in the Customs Tariff Act 1995 as mandated by the Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006.
Scope and Application
The Tariff Concessions Revocation Instrument 11/2007 applies to the revocation of Tariff Concession Orders (TCOs) as per the Customs Act 1901. Specifically, the instrument addresses the revocation of TCO 0615603, which pertains to goods classified under 8520.90.00, and the establishment of a new TCO, numbered 0614808, for goods classified under 8519.81.90. These instruments are issued under the authority of the Chief Executive Officer of Customs and reflect changes mandated by the Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006, effective from 1 January 2007. The revocation and establishment of new TCOs are crucial to ensure that the correct tariff classifications apply to goods, thereby impacting the duty rates for these items. The instrument applies to any entities or individuals involved in the import or export of goods affected by the specified classifications.
Key Provisions
The Tariff Concessions Revocation Instrument 11/2007, made under the Customs Act 1901, focuses on the revocation of a specific Tariff Concession Order (TCO) and the issuance of a new TCO. Section 269SD(2A) of the Act mandates that the Chief Executive Officer of Customs (CEO) must revoke a TCO if, due to amendments in the Customs Tariff Act 1995, the tariff classification stated in the TCO will no longer apply to the goods in question from a particular date. The Instrument revokes TCO 0615603 of classification 8520.90.00 and establishes new TCO 0614808 of classification 8519.81.90. These changes reflect the alterations in the Customs Tariff Act 1995 as per the Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006, which became effective from 1 January 2007.
The Act imposes several obligations on the CEO. Firstly, under section 269C, the CEO must ensure that a TCO is issued only if the application meets the core criteria, which includes verifying that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Secondly, as per section 269SD(2A), the CEO is required to revoke a TCO if changes in the Customs Tariff Act 1995 mean that the tariff classification stated in the TCO will no longer apply to the relevant goods from a particular date. Additionally, the CEO must issue a new TCO to reflect the correct tariff classification. These obligations ensure that the tariff concessions remain accurate and applicable to the correct goods, maintaining the integrity of the customs duty system.
Breaches of the obligations outlined in the Customs Act 1901 can lead to civil and criminal consequences. Under section 269P, if the CEO fails to make a TCO when an application meets the core criteria, this can result in the improper application of customs duty rates, leading to potential financial losses for both the government and importers. Similarly, if the CEO fails to revoke or amend a TCO in light of changes in the Customs Tariff Act 1995, this can result in incorrect tariff classifications being applied, again leading to financial discrepancies. The penalties for such breaches may include fines and, in more severe cases, imprisonment, reflecting the seriousness of ensuring the correct application of customs duties.