EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516750
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.
NPT Pty Ltd applied for a TCO in respect of certain fork lift wheels on 5 December 2005.
Instrument
TCO No 0516750 was made on 03 March 2006. It declares that those certain fork lift wheels 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. 0516750 is taken to have come into force on 5 December 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 Australian Parliament, was designed to facilitate trade by providing a framework for the administration of customs duties and regulations. It introduced a scheme under which Tariff Concession Orders (TCOs) could be made, thereby addressing the need to provide relief from customs duties for certain goods under specific circumstances. This legislative framework allows the Chief Executive Officer of Customs to reduce or eliminate customs duty on goods where it is determined that no substitutable goods are produced in Australia, thus supporting the policy objective of fostering competitive markets and encouraging the import of goods that are not locally produced. The explanatory statement accompanying Instrument No. 0516750, made under the Customs Act 1901, clarifies the process and criteria for issuing a TCO, ensuring transparency and due process in the application and implementation of tariff concessions.
Scope and Application
The Customs Act 1901 provides for the implementation of Tariff Concession Orders (TCO) through which the Chief Executive Officer of Customs (CEO) can reduce the customs duty rate on certain goods. The Act applies to any person who wishes to apply for a TCO in respect of goods, subject to the criteria outlined in the Act. Specifically, the CEO must be satisfied that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO, and that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Act applies nationally across Australia as it is a Commonwealth Act, and its scope is further defined by the Customs Tariff Act 1995. The application of the Act is extended through subordinate instruments, such as the Customs Regulations 1994, which govern the procedural aspects of applying for a TCO. There are no stated exclusions or exemptions within the primary text of the Act, though the CEO has discretion to refuse an application if it does not meet the core criteria. The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, thereby protecting third parties from any adverse effects of the concession.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269P, and 269SJ of the Customs Act 1901. Section 269C specifies the core criteria that must be met for an application for a Tariff Concession Order (TCO) to be approved. Specifically, the application must be for goods that do not have any substitutable goods produced in Australia in the ordinary course of business on the date the application is lodged (section 269C). Section 269P(3) then mandates that if these core criteria are met, the Chief Executive Officer of Customs (CEO) must issue a written order, which constitutes the TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question. Section 269SJ, meanwhile, details the types of goods that cannot be subject to a TCO.
The obligations imposed by this Act primarily fall on applicants and the CEO. Applicants, such as NPT Pty Ltd in this case, must ensure that their TCO application meets the core criteria as outlined in section 269C. This involves demonstrating that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. The CEO, on the other hand, is required to assess the application against these criteria and, if satisfied, issue a written TCO as specified in section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be granted. In this instance, the CEO did not receive any submissions in response to the published notice.
The Act does not explicitly state any offences or penalties for breaches of its provisions. However, the process for obtaining a TCO is strictly regulated, and failure to comply with the criteria outlined in section 269C could result in the CEO denying the application. Additionally, while the Act does not impose direct civil or criminal penalties for breaches, non-compliance with customs regulations more broadly could result in penalties under other provisions of the Customs Act 1901 or related legislation. For example, knowingly making a false statement in a customs document could attract penalties under section 242 of the Customs Act 1901, which includes fines and potential imprisonment.