EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0412367
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.
Able Demolitions and Excavating Pty Ltd applied for a TCO in respect of certain concrete and/or metal demolition shears on 17 November 2004.
Instrument
TCO No 0412367 was made on 1 February 2005. It declares that those certain concrete and/or metal demolition shears 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. 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. 0412367 is taken to have come into force on 17 November 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. 0412367, enacted in 2005, pertains to the Customs Act 1901 and was introduced to address the need for a scheme allowing for tariff concessions on specific goods. The Customs Act 1901 establishes the framework for Tariff Concession Orders (TCOs) which reduce the rate of customs duty on goods meeting certain criteria. This instrument specifically targets Able Demolitions and Excavating Pty Ltd’s application for a TCO concerning certain concrete and/or metal demolition shears. The Tariff Concession Order No. 0412367 was made on 1 February 2005, following the Chief Executive Officer of Customs’ determination that the application met the core criteria outlined in the Act, including the absence of substitutable goods produced in Australia. The policy objective of this instrument is to provide tariff relief on these specific goods, reducing the general duty rate of 5% to 3%, thereby benefiting importers by potentially allowing them to claim refunds for duties paid prior to the TCO’s effective date.
Scope and Application
The Tariff Concession Instrument No. 0412367, pursuant to Part XVA of the Customs Act 1901, applies to the import of certain concrete and/or metal demolition shears, as specified in the instrument. This Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which reduce the rate of customs duty applicable to specified goods, provided certain criteria are met. The application of the TCO is contingent on the condition that no substitutable goods are produced in Australia in the ordinary course of business. Able Demolitions and Excavating Pty Ltd was granted a TCO for their specified demolition shears, reducing the duty rate from 5% to 3%, effective from 17 November 2004. This instrument does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person. The TCO was made in accordance with the Customs Act 1901 and the Customs Tariff Act 1995, and no submissions were received in opposition to the application.
Key Provisions
The main operative sections of the Customs Act 1901, as applied through Tariff Concession Instrument No. 0412367, include section 269F, which allows for the application for a Tariff Concession Order (TCO) by a person to the Chief Executive Officer of Customs (CEO) (subsection 269F). If the CEO determines that the application is not for goods that cannot be subject to a TCO under section 269SJ, they must then assess whether the application meets the core criteria stipulated in section 269C. This requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they must make a written TCO under section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. In this specific case, the TCO No. 0412367 applies item 50 of Schedule 4, which reduces the duty rate for certain concrete and/or metal demolition shears from the general rate of 5% to 3%.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to ensure that TCO applications are not for goods specified in section 269SJ and must meet the core criteria set out in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as per subsection 269K(1). In this instance, the CEO published such a notice and received no submissions against the TCO. Additionally, the Act ensures that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, and it does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.
For breaches of the provisions within the Customs Act 1901, the Act does not explicitly state specific offences, penalties, or civil/criminal consequences. However, failure to comply with the conditions set out for the TCO, such as providing false information or not meeting the core criteria, may result in the CEO not making the TCO, potentially leading to higher duties on the goods. In the case of fraudulent activities or deliberate non-compliance, general provisions of the Customs Act 1901 might apply, which could include fines or imprisonment. Furthermore, any misuse of the TCO, such as importing goods without the proper duty paid, could result in additional penalties under the broader customs regulations.