EXPLANATORY STATEMENT
Tariff Concessions Revocation Instrument 86/2006
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(2) of the Act provides that if the CEO is satisfied that:
− because of an amendment of the Customs Tariff Act 1995; or
− having regard to a decision of a court of the Administrative Appeals Tribunal; or
− having regard to written advice on the matter given by an officer of Customs;
the tariff classification that is stated in a TCO to apply to the goods the subject of the TCO has not, with effect from a particular day, applied 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 the revocation.
Instrument
Tariff Concessions Revocation Instrument No 86/2006 was made on 9 September 2006. It revokes TCO 0509683 and makes TCO 0616830. The tariff classification has been changed from 8412.29.00 to 8412.90.90 because of a tariff classification change.
Consultation
No consultation was undertaken since the change is minor or machinery nature and does not substantially alter existing arrangements.
Commencement
Subsection 269SD(2) provides that the order revoking the TCO has effect from the day on which the tariff classification did not apply to the goods. Further the new TCO has effect from the revocation. Subsection 269SD(4) provides that the day may be the day on which the old TCO came into force or a later day.
Subsection 269SD(6) provides that section 269SD has effect despite section 12 of the Legislative Instruments Act 2003. Section 12 prohibits the making of certain retrospective legislative instruments.
Tariff Concessions Revocation Instrument No. 86/2006 revoked 0509683 and made new TCO 0616830 on 9 September 2006.
Overview
The Tariff Concessions Revocation Instrument 86/2006 was enacted to address the need for adjustments in tariff classifications within the Customs Act 1901. This legislative instrument was introduced to ensure that the application of tariff concessions remains accurate and up to date, particularly in light of changes to the Customs Tariff Act 1995 or decisions made by the Administrative Appeals Tribunal. The enacting body was the Chief Executive Officer of Customs, authorised to make such changes in accordance with the provisions of the Customs Act. The primary policy objective was to maintain the integrity and effectiveness of the tariff concession scheme by revoking outdated tariff concession orders and establishing new ones that reflect current tariff classifications.
This instrument was introduced without consultation as it was deemed a minor or machinery-related change that did not substantially alter existing arrangements. It came into effect on the day it was made, 9 September 2006, and operates despite certain prohibitions on retrospective legislative instruments as outlined in the Legislative Instruments Act 2003. The Tariff Concessions Revocation Instrument 86/2006 revoked the previous Tariff Concession Order 0509683 and established a new order, 0616830, due to a change in tariff classification from 8412.29.00 to 8412.90.90.
Scope and Application
The Tariff Concessions Revocation Instrument 86/2006 operates under the Customs Act 1901, specifically addressing the revocation and reissuance of Tariff Concession Orders (TCOs). The instrument applies to goods that were previously subject to a TCO, which is revoked and subsequently replaced with a new TCO due to a change in tariff classification. This change can occur because of amendments to the Customs Tariff Act 1995, a court decision, or advice from a Customs officer. The revocation and creation of new TCOs are overseen by the Chief Executive Officer of Customs, who must ensure that the new tariff classification correctly applies to the goods in question. The geographic reach of this instrument is national, as it pertains to the administration of customs duties across Australia. The instrument does not specify any exclusions or exemptions but operates under the condition that the tariff classification change results in the goods no longer being eligible for the original TCO. The revocation and new TCO take effect from the day the old classification no longer applies, with the specific date determined by the CEO, potentially backdating to when the original TCO came into force.
Key Provisions
The Tariff Concessions Revocation Instrument 86/2006 (the Instrument), made under sections 269C and 269P of the Customs Act 1901 (the Act), revokes Tariff Concession Order (TCO) 0509683 and establishes a new TCO, 0616830, effective from 9 September 2006. The revocation and creation of these orders are based on a change in tariff classification for certain goods, shifting from 8412.29.00 to 8412.90.90. This change was necessitated by an amendment to the Customs Tariff Act 1995. This Instrument serves to ensure that the correct tariff classification is applied to the goods in question, thus adjusting the customs duty rates accordingly.
Under the Customs Act, the Chief Executive Officer of Customs (the CEO) is responsible for making and revoking TCOs, which are designed to lower customs duty rates on certain imported goods. The CEO is mandated to revoke a TCO if the tariff classification stated in the order no longer applies to the goods, due to changes in the Customs Tariff Act, court decisions, or advice from Customs officers. Once a TCO is revoked, the CEO must issue a new TCO with an updated tariff classification. This ensures that the applicable customs duty rates are accurate and reflect the most recent changes in tariff classifications.
The Instrument imposes specific obligations on parties and entities governed by the Customs Act. Importers, exporters, and other stakeholders must ensure that they are aware of the tariff classifications applicable to their goods. They must also comply with the customs duty rates specified in the applicable TCOs. Failure to adhere to the correct tariff classifications and associated duty rates can result in non-compliance with the Act, potentially leading to legal consequences.
The Act includes provisions for offences, penalties, and consequences for breaches. While the Instrument itself does not detail specific penalties, breaches of the Customs Act can result in significant penalties. For example, under section 243 of the Act, individuals or entities may face fines up to $22,200 and/or imprisonment for up to two years for customs-related offences. For corporate entities, the fines can be substantially higher, up to 10,000 penalty units, which as of 2023, equates to approximately $1.8 million. These penalties underscore the importance of compliance with the Act and its associated orders.