EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606987
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.
Caterpillar S.A.R.L. applied for a TCO in respect of certain graders on 18 April 2006.
Instrument
TCO No 0606987 was made on 7 July 2006. It declares that those certain graders 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. 0606987 is taken to have come into force on 18 April 2006.
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 was enacted to manage the importation of goods into Australia, including the collection of customs duties. The problem it addresses is ensuring that imports are subject to appropriate duty rates and regulations. The Tariff Concession Instrument No. 0606987 was introduced to provide tariff concessions for specific goods that are not produced in Australia, thus allowing for lower rates of customs duty. This instrument was enacted by the Parliament of Australia to provide a streamlined process for granting tariff concessions, facilitating trade by reducing duty burdens on certain imported goods. The policy objective is to support economic activity by ensuring that imports are not unduly taxed if they do not have Australian-made alternatives, thereby promoting competitive pricing and market access for these goods.
Scope and Application
The Tariff Concession Instrument No. 0606987, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain graders, and pertains to the tariff concessions granted to these goods. This instrument is applicable to any person or entity involved in the importation of these specified graders into Australia. The geographic and jurisdictional reach of this instrument is national, as it is governed by the Commonwealth of Australia. The instrument does not impose any liabilities on any person other than the Commonwealth, and it does not affect the rights of any person as at the date of registration. The instrument does not disadvantage any person or impose liabilities in respect of anything done or omitted to be done before the date of registration. However, it does benefit importers who can apply for a refund of duty on goods imported since the day on which the Tariff Concession Order is taken to have come into force.
The instrument extends its application through subordinate instruments, which include the Customs Act 1901 and the Customs Tariff Act 1995. The Customs Act 1901 provides the framework under which Tariff Concession Orders can be made by the Chief Executive Officer of Customs. Section 269F of the Act allows a person to apply for a Tariff Concession Order in respect of goods, provided 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 Tariff Concession Order. Section 269C of the Act outlines the core criteria that a Tariff Concession Order application must meet, including the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Customs Tariff Act 1995 further specifies the rates of duty applicable to the goods under the Tariff Concession Order.
Key Provisions
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (section 269F). When a person applies for a TCO in respect of certain goods, the CEO must consider whether the application meets the core criteria outlined in the Act (section 269C). These criteria include ensuring that no substitutable goods were produced in Australia at the time of application (section 269P(3)). If the CEO is satisfied that these criteria are met, they must make a written order, declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty rate.
The obligations imposed by the Act on the parties involved are significant. The CEO has the responsibility to evaluate TCO applications thoroughly, ensuring that the criteria are met before proceeding with the issuance of an order. This includes verifying that no substitutable goods were produced in Australia at the relevant time (section 269C). The applicant, on the other hand, must provide all necessary information and evidence to support their application, ensuring transparency and compliance with the Act’s requirements. Additionally, the CEO is mandated to publish a notice in the Gazette, inviting any person who believes there are reasons against the TCO to lodge a submission (subsection 269K(1)). This ensures that the decision-making process is inclusive and considers all relevant perspectives.
Failure to comply with the requirements set out in the Customs Act 1901 can result in serious consequences. The Act does not explicitly state penalties for non-compliance, but breaches of similar provisions in related legislation often result in fines or other penalties. For instance, under the Crimes Act 1914, penalties for knowingly making a false statement or providing false information can include fines up to $22,200 for individuals and $111,000 for corporations, along with potential imprisonment terms. Additionally, there could be civil consequences for any party that suffers a disadvantage due to non-compliance, including the right to seek compensation in a court of law.