EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515070
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.
Mammoet Australia Pty Ltd applied for a TCO in respect of certain platform trailers on 31 October 2005.
Instrument
TCO No 0515070 was made on 24 January 2006. It declares that those certain platform trailers 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.0515070 is taken to have come into force on 31 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 Tariff Concession Instrument No. 0515070, enacted under the Customs Act 1901, was introduced to address the issue of tariff concessions for specific goods, aiming to provide relief to certain importers by reducing the customs duty on goods that are not produced domestically. This instrument was developed in response to applications such as the one submitted by Mammoet Australia Pty Ltd for tariff concessions on certain platform trailers. The Act allows for the Chief Executive Officer of Customs to make Tariff Concession Orders if the application meets specific criteria, such as the absence of substitutable goods produced in Australia.
This instrument was enacted by the Parliament of Australia and aims to ensure that the application process for tariff concessions is transparent and fair, inviting public submissions to prevent the granting of concessions that could disadvantage domestic producers or unfairly benefit certain importers. The Tariff Concession Instrument No. 0515070 was published in the Gazette, and no submissions were received, leading to the decision to grant the concession on the specified platform trailers, reducing their customs duty rate to zero.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) which can apply to particular goods to reduce or eliminate customs duty. These orders are made by the Chief Executive Officer of Customs (CEO) following an application under section 269F of the Act, provided the goods in question are not excluded as per section 269SJ. An application will meet the core criteria for a TCO if, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. If the CEO determines that the application meets these criteria, a written order will be issued under section 269P(3) of the Act, specifying the reduced tariff treatment for the goods. This particular legislation applies to any entity or person seeking tariff concessions for specific goods, and it operates at a Commonwealth level. The scope of the Act can be extended through subordinate instruments, but no exclusions or exemptions are stated within the provided text. For instance, TCO No. 0515070, which was made in respect of certain platform trailers, illustrates how the Act operates in practice, with the CEO making a decision based on the absence of substitutable goods produced in Australia.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0515070 under the Customs Act 1901 (sections 269C, 269P(3), and 269S) establish the process through which the Chief Executive Officer (CEO) of Customs can grant Tariff Concession Orders (TCOs). Section 269C sets out the core criteria that an application must meet, such as the absence of substitutable goods produced in Australia. Section 269P(3) requires the CEO to issue a written TCO if the application meets these criteria, while section 269S specifies that the TCO is effective from the date the application is lodged. In this case, the CEO issued TCO No. 0515070 on 24 January 2006, declaring that certain platform trailers are subject to a zero-rate duty as they meet the specified criteria.
The obligations and requirements imposed by the Act on the parties involved, particularly the CEO, are detailed in sections 269K and 269S. Section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted. This ensures transparency and allows for potential objections to be raised. Section 269S clarifies that the TCO becomes effective from the date the application is lodged, which in this case was 31 October 2005. The Act also ensures that the rights of importers are positively affected, allowing them to apply for refunds of duty paid on imports since the effective date of the TCO.
The Act includes provisions for offences, penalties, or consequences for breaches. Although specific penalties are not detailed in the explanatory statement, breaches of the Customs Act 1901 can generally lead to civil and criminal penalties. Civil penalties can include fines and pecuniary penalties, while criminal penalties may involve imprisonment, reflecting the seriousness with which the Act treats non-compliance. The maximum penalties would depend on the specific nature and severity of the breach, as outlined in other sections of the Act and related legislation.
Overall, the Tariff Concession Instrument No. 0515070 under the Customs Act 1901 provides a structured framework for granting tariff concessions, ensuring that the process is transparent and that the rights of all parties, particularly importers, are protected. The obligations on the CEO to consider applications and publish notices for public submissions ensure that the process is fair and inclusive. Any breaches of the Act could result in significant penalties, reinforcing the importance of compliance.