EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0501211
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 & Excavating Pty Ltd applied for a TCO in respect of certain concrete crushers on 25 January 2005.
Instrument
TCO No 0501211 was made on 3 June 2005. It declares that those certain concrete crushers 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 0%.
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 Abon Engineering 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. 0501211 is taken to have come into force on 25 January 2005.
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. 0501211, enacted in 2005, is a regulation under the Customs Act 1901, designed to address the need for tariff concessions on specific goods, thereby reducing the customs duty burden on importers. The Customs Act provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty for certain goods, provided that no substitutable goods are produced in Australia. This regulation was enacted by the relevant executive authority in response to an application from Able Demolitions & Excavating Pty Ltd for a tariff concession on certain concrete crushers, ensuring that the goods in question are subject to a reduced duty rate of 0% rather than the general rate of 5%. The policy objective is to facilitate the importation of these goods by lowering the associated customs duty, thereby benefiting the rights of importers who can apply for a refund of duty paid on imports since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically through Part XVA, allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods specified in the application, provided the application meets the core criteria outlined in the Act. An application for a TCO can be made by any person, and the CEO must decide if it satisfies the conditions that no substitutable goods were produced in Australia in the ordinary course of business. The application process requires the CEO to publish a notice in the Gazette, inviting submissions from any interested parties, as was done with the application by Able Demolitions & Excavating Pty Ltd for certain concrete crushers. The TCO applies to the specific goods from the date of application lodgement, but it does not retroactively affect rights or impose liabilities on persons other than the Commonwealth. This particular TCO, No. 0501211, concerns concrete crushers and reduces their customs duty rate from 5% to 0%, effective from 25 January 2005.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0501211, made under the Customs Act 1901 (the Act), revolve around the issuance of Tariff Concession Orders (TCOs) to lower the rate of customs duty on specified goods. Specifically, section 269F (1) of the Act allows for the application to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application is valid and meets the core criteria as outlined in section 269C, the CEO must issue a TCO. Section 269C stipulates that the core criteria are met if, on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. For the purposes of these definitions, section 269D defines "goods produced in Australia", section 269E defines "ordinary course of business", and section 269D also defines "substitutable goods" as those produced in Australia that could serve a use similar to the goods in question.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must submit a valid application for a TCO under section 269F, ensuring that the goods specified in the application do not fall under the exclusions listed in section 269SJ. The CEO is obligated to assess the application against the core criteria set out in section 269C and to decide whether to issue a TCO. If the CEO is satisfied that the application meets the criteria, they must make a written order as specified in subsection 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made.
Breaches of the provisions of the Act can lead to various consequences, although specific offences and penalties are not detailed in this TCO. However, the general legal framework of the Customs Act 1901 would apply, which may include administrative penalties for non-compliance with the Act’s requirements. It is important for applicants and entities governed by this legislation to adhere to the stipulated criteria and procedures to avoid any potential legal ramifications. In the case of Able Demolitions & Excavating Pty Ltd, their application for the TCO was successful, and the CEO issued TCO No. 0501211, effective from 25 January 2005, which reduced the duty on certain concrete crushers from 5% to 0%.