EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509094
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.
Hagglunds Drives Pty Ltd applied for a TCO in respect of certain hydraulic motor cam roller assemblies on 13 July 2005.
Instrument
TCO No 0509094 was made on 23 September 2005. It declares that the certain hydraulic motor cam roller assemblies 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. 0509094 is taken to have come into force on 13 July 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. 0509094, enacted in 2005 under the Customs Act 1901, was introduced to provide tariff concessions for certain hydraulic motor cam roller assemblies. This legislation aims to ensure that the application of lower customs duties is appropriately aligned with the economic circumstances and market conditions in Australia, particularly when no substitutable goods are produced domestically. The instrument was developed in response to an application by Hagglunds Drives Pty Ltd, and the process followed the established procedure under section 269F of the Act, wherein the Chief Executive Officer of Customs (CEO) assessed the application against the core criteria outlined in sections 269C and 269P of the Act. This process ensured that the application was valid and that no substitutable goods were produced in Australia on the date the application was lodged. The instrument took effect on 13 July 2005, the date the application was lodged, and provided a zero percent duty rate on the specified goods, which contrasts with the general rate of 5 percent.
Scope and Application
The Tariff Concession Instrument No. 0509094 under the Customs Act 1901 applies to goods specified in the application made to the Chief Executive Officer of Customs (CEO). This Act governs the process for applying for and granting tariff concessions, which involve a reduction in customs duty for certain goods. The application must meet the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time the application was lodged. The instrument specifies that certain hydraulic motor cam roller assemblies, which are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, will be charged a zero rate of duty instead of the general rate of 5%. The application process requires the CEO to publish a notice in the Gazette inviting submissions on the application, though in this case, no objections were received. The TCO applies from the date the application was lodged, 13 July 2005, and it does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0509094 under the Customs Act 1901 (referred to as the Act) primarily focus on the establishment and effects of Tariff Concession Orders (TCOs). Section 269C (1) and (2) outline the conditions under which the Chief Executive Officer of Customs (CEO) must assess an application to determine whether a TCO is warranted. Specifically, if the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must make a written order declaring the goods to which the TCO applies (Section 269P(3)). This process is further detailed in Section 269F, which explains how an application for a TCO can be made, and Section 269SJ, which lists the goods that cannot be subject to a TCO. In this particular case, the CEO was satisfied that certain hydraulic motor cam roller assemblies met the core criteria, and therefore, a TCO was issued, reducing the duty rate from 5% to free.
The obligations and requirements imposed by the Act on the parties involved, particularly the CEO, are quite specific. According to Section 269K(1), the CEO must publish a notice in the Gazette inviting any person who may have objections to the TCO application to lodge a submission. In this instance, no submissions were received. Additionally, the CEO must ensure that the TCO application meets the core criteria specified in Section 269C, which includes verifying that no substitutable goods were produced in Australia. This process ensures transparency and provides an opportunity for stakeholders to voice any concerns. Section 269S(1) also specifies that the TCO comes into effect on the day the application was lodged, which in this case was 13 July 2005.
Regarding the consequences for breach or non-compliance, the Act does not explicitly detail specific offences, penalties, or civil/criminal consequences for failing to adhere to the provisions related to TCOs. However, the general provisions of the Customs Act 1901 would apply. For example, any failure to comply with the Act or Regulations could potentially lead to penalties under Section 134, which covers general penalties for contraventions of the Act. The penalties for breaches can include fines and, in severe cases, imprisonment, though the exact penalties would depend on the specific nature and severity of the breach. The Act ensures that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, thereby safeguarding the interests of importers and others involved in the import process.