EXPLANATORY STATEMENT
Tariff Concession Instrument 9/2006
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 Instrument No 0604120 was made on 21 February 2006. It revokes TCO 0516517 and makes TCO 0604120.
Consultation
No consultation was undertaken since the change is minor or of 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 Concession Instrument No. 0604120 revoked 0516517 and made new TCO 0604120 on 21 February 2006.
Overview
The Customs Act 1901 was enacted to facilitate and regulate the customs process in Australia, and specifically, to establish a framework for Tariff Concession Orders (TCOs) under Part XVA. This legislation addresses the problem of ensuring that Australian businesses are not unfairly disadvantaged when substitutable goods are not produced domestically, by providing a mechanism through which lower rates of customs duty can be applied to such goods. The instrument in question, Tariff Concession Instrument No. 0604120, was introduced by the Commonwealth Parliament to revoke TCO 0516517 and establish TCO 0604120, reflecting adjustments necessitated by changes in the Customs Tariff Act 1995 or rulings from the Administrative Appeals Tribunal. The policy objective is to maintain fair and efficient customs practices in alignment with updated tariff classifications.
Scope and Application
The Tariff Concession Instrument 9/2006 is an instrument made under the Customs Act 1901, which pertains to the making and revocation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This instrument applies to goods that are subject to a TCO, where a lower rate of customs duty is applicable. The scope of this Act includes the consideration of whether substitutable goods are produced in Australia, as well as the application of tariff classifications in accordance with the Customs Tariff Act 1995 or decisions of the Administrative Appeals Tribunal. The instrument's application is national, extending across the Commonwealth of Australia, and it applies to all entities and industries involved in importing goods subject to the TCOs. Notably, the Instrument does not require consultation due to its minor or machinery nature and does not substantially alter existing arrangements. The commencement of this instrument is governed by the effective date of the tariff classification change, which may be retroactive to the day the old TCO came into force. This legislative instrument supersedes section 12 of the Legislative Instruments Act 2003, which generally prohibits retrospective legislative instruments.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269P, and 269SD of the Customs Act 1901. Section 269C allows the Chief Executive Officer of Customs (the CEO) to make Tariff Concession Orders (TCOs) under certain conditions, which include the absence of substitutable goods being produced in Australia on the day the application was lodged. Section 269P outlines the requirements for revoking TCOs. Section 269SD(2) mandates the CEO to revoke a TCO if, due to an amendment in the Customs Tariff Act 1995, a court decision, or written advice from a Customs officer, the tariff classification in a TCO no longer applies to the goods. This section also requires the CEO to issue a new TCO to reflect the current tariff classification.
The Act imposes several obligations on the CEO and other relevant parties. The CEO must ensure that the core criteria for making a TCO are met, specifically verifying that no substitutable goods are produced in Australia on the day the application is made. When the CEO is informed that the tariff classification in a TCO no longer applies, they must promptly revoke the existing TCO and issue a new one reflecting the current tariff classification. The obligation to issue new TCOs ensures that the tariff concessions remain aligned with current tariff regulations. Furthermore, the CEO must adhere to the commencement provisions outlined in section 269SD, which dictate the effective dates of the revocation and new TCO, ensuring that the changes do not have retrospective effect except as explicitly allowed under the Act.
Any failure to comply with the provisions of this legislation can result in significant consequences. The Customs Act 1901 does not explicitly list offences or penalties for non-compliance with the TCO provisions in this explanatory statement. However, the consequences of incorrectly applying tariff classifications could include financial penalties for importers or exporters due to incorrect duty assessments. The CEO’s failure to revoke and reissue TCOs when required could lead to legal challenges or administrative penalties, although specific penalties are not outlined in this text. Moreover, the retrospective application of section 269SD, despite the prohibitions in the Legislative Instruments Act 2003, may face judicial scrutiny, potentially leading to judicial review or other legal actions.