EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513536
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.
John Wagstaff Constructions applied for a TCO in respect of certain Piling Drill Rotary Heads on 6 October 2005.
Instrument
TCO No 0513536 was made on 9 January 2006. It declares that those certain Piling Drill Rotary Heads 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. 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. 0513536 is taken to have come into force on 6 October 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 Customs Act 1901, enacted by the Commonwealth Parliament, established a framework for the imposition of customs duties on imported goods. To address specific economic needs and policy objectives, such as promoting industry development and enhancing competitiveness, the Act allows for the creation of Tariff Concession Orders (TCOs) through Part XVA. These orders, issued by the Chief Executive Officer of Customs, reduce the customs duty rate on certain goods, provided that they meet specific criteria, such as the absence of substitutable goods produced in Australia. This mechanism facilitates the reduction of duty rates for particular goods, such as the Piling Drill Rotary Heads in the case of TCO No. 0513536, thereby aiding businesses in their operations while ensuring that the policy objectives of the Customs Act are met without imposing additional liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to individuals and entities seeking lower rates of customs duty on specific goods, provided these goods are not listed in section 269SJ and meet the core criteria set out in section 269C. The act pertains to any person or entity involved in the importation of goods that could benefit from tariff concessions, including businesses and importers. The scope of the act is national, as it operates under the Commonwealth and applies to all states and territories within Australia. The application of the act is subject to the CEO's determination of whether the goods in question have substitutable counterparts produced in Australia, as per sections 269D and 269E. Exclusions from the concessions include goods specified in section 269SJ. The act may be extended or restricted through subordinate instruments, such as regulations, which further define terms and operational details. The TCO No. 0513536, which applies to certain Piling Drill Rotary Heads, exemplifies the act's practical implementation by reducing the duty from 5% to 0% upon meeting the criteria.
Key Provisions
The main sections of this legislation involve the process and criteria for making a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901 (section 269C). The core criteria for granting a TCO are outlined in section 269C, which stipulates that an application will meet the criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D and 269E). Additionally, section 269SJ specifies the goods that cannot be subject to a TCO. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they are required to make a written order (section 269P(3)). This process was followed for Tariff Concession Order No. 0513536, which was made on 9 January 2006 for certain Piling Drill Rotary Heads, declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a rate of duty reduced from 5% to 0%.
The obligations imposed by this Act on the parties involved are primarily centred around the application and assessment process for a TCO. The CEO must ensure that applications for a TCO are assessed against the core criteria, and if satisfied, must make the appropriate written order. The applicant must provide all necessary information and evidence to support their application, and the CEO must consider any submissions received in response to the notice published in the Gazette (section 269K(1)). Once the TCO is made, the CEO must ensure that it is implemented in accordance with the provisions of the Act and the Customs Tariff Act 1995.
There are no specific offences or penalties outlined in this legislation for breach of the TCO provisions. However, any actions taken under the authority of the TCO that contravene other provisions of the Customs Act 1901 or the Customs Tariff Act 1995 may be subject to the penalties provided under those Acts. For instance, any failure to comply with the terms of the TCO could potentially lead to penalties under section 238 of the Customs Act 1901, which includes fines and imprisonment, or under section 126 of the Customs Regulations 1993, which includes fines for under-declaration of duty. It is essential for all parties involved to adhere to the requirements of the TCO and the broader customs legislation to avoid any legal repercussions.