EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506270
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.
CNH Australia Pty Ltd applied for a TCO in respect of certain cane harvesters on 27 May 2005.
Instrument
TCO No 0506270 was made on 07 October 2005. It declares that those certain cane harvesters 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 free.
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. 0506270 is taken to have come into force on 27 May 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. 0506270 was enacted under the Customs Act 1901 to address a specific gap in tariff concessions for certain imported goods. This legislation allows the Chief Executive Officer of Customs to grant tariff concessions on goods that are not produced in Australia and for which no substitutable goods are produced domestically. The problem this instrument was introduced to address is the potential trade imbalance and economic disadvantage caused by high tariff rates on imported goods that have no local equivalent. The objective is to encourage the importation of specific goods by reducing their customs duty, thereby facilitating trade and potentially lowering costs for businesses that rely on these imports.
This instrument was developed by the Australian government, specifically through the enactment of the Customs Act 1901 by the Australian Parliament. The policy objective behind this legislation is to provide a mechanism for tariff concessions that support the economic efficiency and competitiveness of Australian industries by allowing for the importation of goods that are not produced domestically at a reduced tariff rate. The instrument does not disadvantage existing rights of non-Commonwealth persons and ensures that importers can benefit from a refund of duty on goods imported since the concession came into force.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0506270, facilitates the application of lower rates of customs duty on certain specified goods via Tariff Concession Orders (TCOs). This legislation applies to any entity or person who is eligible to apply for a TCO in respect of goods, provided these goods are not among those explicitly excluded by section 269SJ of the Act. The Act mandates that the Chief Executive Officer of Customs must consider whether the goods in question are unique and not substitutable by any goods produced domestically in the ordinary course of business. Should the application meet these criteria, the CEO is obligated to make a written TCO, as seen in the case of CNH Australia Pty Ltd's application for tariff concessions on certain cane harvesters. This TCO applies nationally across Australia, with the specific cane harvesters in question now subject to a duty rate of free, rather than the general rate of 5%. The TCO does not retroactively affect any pre-existing rights or liabilities, ensuring that it only benefits those who import the specified goods from the date the TCO was lodged.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0506270 (as referenced in the Customs Act 1901) concern the granting of tariff concessions for specific goods, in this case certain cane harvesters. Under section 269F, an application for a Tariff Concession Order (TCO) can be submitted to the Chief Executive Officer of Customs (CEO), who must consider the application against the core criteria outlined in sections 269C and 269P(3). If the CEO is satisfied that the application meets these criteria, which include ensuring that no substitutable goods are produced in Australia, they are required to issue a TCO as per section 269P(3). For the cane harvesters in question, this means that they now attract a duty rate of free, instead of the general rate of 5%, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The applicant, in this case CNH Australia Pty Ltd, must ensure their application is valid and meets the specified criteria. The CEO, on the other hand, must thoroughly review the application, publish a notice in the Gazette inviting any interested parties to object to the TCO, and make a decision based on the evidence and submissions received. In this instance, no objections were received, allowing the CEO to proceed with issuing the TCO. Moreover, the CEO is required to ensure that the rights of existing importers are protected, allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
The Customs Act 1901 also outlines potential consequences for non-compliance with the provisions of the Act. Any party found to be in breach of the Act may face civil or criminal penalties, depending on the nature and severity of the offence. However, the specific penalties for breaches related to TCOs are not detailed in the explanatory statement. In general, penalties for contraventions of the Customs Act can include fines and imprisonment, with the exact penalties varying based on the specific offence committed. It is essential for all parties involved to adhere to the Act's requirements to avoid any potential legal consequences.