EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0410525
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.
Caroma Industries PtyLtd applied for a TCO in respect of certain unmanned shuttles on 6 October 2004.
Instrument
TCO No 0410525 was made on 7 March 2005. It declares that those certain unmanned shuttles 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 3%.
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. One submission objecting to the TCO application was received from Crown Equipment Pty Ltd.
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. 0410525 is taken to have come into force on 6 October 2004.
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. 0410525 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods, allowing for reduced customs duties where no substitutable goods are produced in Australia. This legislation was introduced to provide a mechanism for the Chief Executive Officer of Customs to grant Tariff Concession Orders, thereby facilitating trade by lowering import costs for certain goods. The objective, as outlined in the explanatory statement, is to provide tariff relief to importers of specified goods, thereby enhancing their competitive position in the market.
This instrument was created following an application by Caroma Industries Pty Ltd for a tariff concession on certain unmanned shuttles, which was approved by the CEO after considering objections from Crown Equipment Pty Ltd. The concession reduces the duty on these goods from the general rate of 5% to 3%, effective from the date of the application, 6 October 2004. The concession was published in the Gazette, allowing for public submissions, and it does not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0410525, made under the Customs Act 1901, applies to the application process for Tariff Concession Orders (TCOs) concerning specific goods, in this case, certain unmanned shuttles. The Act pertains to individuals or entities, such as Caroma Industries Pty Ltd, seeking tariff concessions for goods imported into Australia. These concessions reduce the customs duty on specified goods from the general rate to a lower rate as outlined in the order. The process requires the Chief Executive Officer of Customs to assess whether the application meets the core criteria, specifically whether no substitutable goods are produced in Australia. This legislative instrument has a national jurisdictional reach within Australia, affecting all parties involved in the importation of the specified goods. The application of the TCO does not disadvantage any person in respect of actions taken prior to the order's registration and allows importers to apply for a refund of duty on goods imported since the TCO's effective date. The instrument may be extended or restricted through subordinate instruments as necessary.
Key Provisions
The primary operative sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 0410525, pertain to the process by which Tariff Concession Orders (TCO) are made (sections 269F, 269C, 269B, and 269P). Section 269F allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is valid, the CEO must determine whether it meets the core criteria set out in section 269C. If no substitutable goods are produced in Australia on the day the application is lodged, the CEO must make a written order declaring that the goods are subject to a lower rate of customs duty (section 269P(3)).
The obligations imposed by the Act and the Instrument on the parties include the requirement for applicants to ensure their applications are valid and meet the core criteria. The CEO is obligated to process applications in a timely manner, consider any submissions made against an application, and make a decision based on the evidence provided. In this instance, the CEO was required to publish a notice in the Gazette inviting any interested parties to submit objections to the application for the TCO in respect of certain unmanned shuttles. Additionally, the CEO must ensure that the rights of importers are protected under the new tariff concession, including the ability to apply for a refund of duty on goods imported since the TCO was taken to have come into force.
Failure to comply with the requirements of the Customs Act 1901 or the Tariff Concession Instrument may result in various consequences. Section 278 of the Customs Act provides for the imposition of penalties for offences such as making a false or misleading statement in an application for a TCO, which carries a maximum penalty of 10,000 penalty units or imprisonment for five years, or both. Additionally, any person who knowingly or recklessly imports goods in contravention of the Act may be liable for civil penalties under section 154 of the Act. These penalties can include fines of up to 10,000 penalty units or imprisonment for two years, or both. The Act also provides for the recovery of duties and taxes where goods are imported in breach of the Act.