EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0500318
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.
Sandvik Mining & Construction Pty Ltd applied for a TCO in respect of certain rear dump trucks on 11 January 2005.
Instrument
TCO No 0500318 was made on 11 March 2005. It declares that those certain rear dump trucks 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. 0500318 is taken to have come into force on 11 January.
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. 0500318, enacted in 2005 under the Customs Act 1901, addresses the need for tariff concessions on specific goods by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet certain criteria. This legislative instrument was introduced to provide relief to importers by reducing the customs duty on certain goods, in this case, rear dump trucks, from the general rate of 5% to a concessional rate of 3%. The instrument aims to facilitate smoother importation of these goods by Sandvik Mining & Construction Pty Ltd, ensuring they are not disadvantaged by the tariff structure. The policy objective is to support Australian importers by providing tariff concessions where no substitutable goods are produced domestically, thus encouraging trade and economic growth. The instrument was developed in consultation with relevant stakeholders, with no objections raised during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 0500318 applies to the specific goods, namely certain rear dump trucks, as identified in the application made by Sandvik Mining & Construction Pty Ltd. This Act facilitates the granting of tariff concessions under the Customs Act 1901, which applies at a Commonwealth level, by allowing for lower rates of customs duty on goods that are the subject of a Tariff Concession Order (TCO). The legislation is designed for entities and individuals involved in the importation of these specified goods, providing them with a reduced duty rate, contingent upon the criteria set out in the Act being met. The application of this Act is limited to goods that are not specified in section 269SJ of the Customs Act 1901, which outlines goods that are ineligible for a TCO. The Act's jurisdiction extends nationally, applying across all states and territories within Australia, as it operates under the authority of the Commonwealth. The TCO does not impose any new liabilities and does not affect any existing rights of persons other than the Commonwealth. The commencement of this TCO is deemed to be effective from the date the application was lodged, which in this case was 11 January 2005. The application process and the decision-making authority are carried out by the Chief Executive Officer of Customs, who has the discretion to make a written order if certain conditions are satisfied, including the publication of a notice in the Gazette and the absence of submissions against the concession.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0500318 (the Instrument) under the Customs Act 1901 (the Act) revolve around the creation and implementation of a Tariff Concession Order (TCO) for certain rear dump trucks. Section 269C of the Act outlines that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D, 269E, and 269F. Upon satisfying these criteria, the Chief Executive Officer of Customs (the CEO) is required to make a written order (a TCO) specifying the lower rate of customs duty for the goods in question (Section 269P(3)). The CEO, in this instance, has declared that the certain rear dump trucks are subject to a duty rate of 3% as per item 50 of Schedule 4 to the Customs Tariff Act 1995, rather than the general rate of 5%.
The obligations and requirements imposed by the Act on the parties involved are primarily on the CEO and the applicant, Sandvik Mining & Construction Pty Ltd. The CEO must ensure that the application for a TCO meets the core criteria stipulated in section 269C and that the goods do not fall under the prohibited categories listed in section 269SJ. Once the CEO is satisfied that these conditions are met, the CEO must issue the TCO and publish a notice in the Gazette inviting any objections or submissions from the public, as required by section 269K(1) of the Act. In this case, the CEO did not receive any submissions, allowing the TCO to proceed without further delay. Sandvik Mining & Construction Pty Ltd must ensure that their application is complete and accurate, providing all necessary information and evidence to support their claim for a tariff concession.
The Act also specifies the consequences for breaches or non-compliance with the provisions of the TCO. While the explanatory statement does not detail specific offences or penalties for failing to comply with the TCO, it is reasonable to infer that general provisions within the Customs Act 1901 would apply. These may include penalties for providing false or misleading information in the application process, or for attempting to evade the terms of the TCO by misclassifying goods. Under the Customs Act 1901, penalties for such offences can include fines and, in serious cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, but they are designed to enforce compliance and maintain the integrity of the tariff concession scheme.