EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606993
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.
Concrete Pumping Equipment Pty Ltd applied for a TCO in respect of certain vehicle mounted material conveyors on 13 April 2006.
Instrument
TCO No 0606993 was made on 30 June 2006. It declares that those certain vehicle mounted material conveyors 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. 0606993 is taken to have come into force on 13 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, enacted by the Commonwealth Parliament, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders allow for reduced customs duty rates on specific goods, addressing the need for economic incentives and facilitating trade by lowering the cost of imported goods. This particular legislation, Tariff Concession Instrument No. 0606993, was introduced to provide a concession for certain vehicle-mounted material conveyors, effectively reducing their customs duty rate from 5% to free. The policy objective is to support industries by making imported goods more affordable, thereby encouraging their use and potentially fostering local production alternatives in the long term.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce customs duty on certain goods. The Act applies to any person or entity that can demonstrate that the goods they wish to import are not produced in Australia in the ordinary course of business and for which no substitutable goods are produced domestically. The application process requires satisfying core criteria, such as the absence of domestic production of substitutable goods, as per section 269C. The TCO scheme is applicable across Australia, and the CEO's decision to grant a TCO is based on satisfying these criteria, with no public submissions received in the case of TCO No. 0606993. The TCO does not retroactively affect any existing rights or liabilities, ensuring that it only benefits importers from the date of the TCO's effective application, which coincides with the date the application was lodged.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269S of the Customs Act 1901, which set out the criteria and process for making Tariff Concession Orders (TCOs). Section 269C requires that a TCO application meets core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, a written order must be made, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269S(1) specifies that the TCO comes into force on the day the application was lodged.
Under this Act, the CEO has specific obligations when considering a TCO application. If the application is deemed valid and not in respect of goods specified in section 269SJ of the Act, the CEO must assess whether the application meets the core criteria outlined in section 269C. If satisfied, the CEO must issue a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission, as per subsection 269K(1). In this instance, no submissions were received. The CEO’s role also includes ensuring that the TCO does not adversely affect the rights of any person except the Commonwealth as at the date of registration, nor impose liabilities in respect of anything done or omitted before that date.
The Act includes provisions for breaches and penalties, although the specific details are not provided in the explanatory statement. Generally, under the Customs Act 1901, breaches of customs regulations can lead to both civil and criminal penalties. Civil penalties can include fines and recovery of unpaid duty. Criminal penalties may involve imprisonment, fines, or both, depending on the severity of the breach. The maximum penalties would be determined based on the specific breach and the relevant sections of the Customs Act 1901. It is important to note that while the explanatory statement does not detail the specific penalties for breaches of this TCO, they would align with the general penalties applicable under the Act.
In summary, the Customs Act 1901 provides a framework for the CEO to assess and grant TCOs, ensuring that certain goods are eligible for reduced customs duty. The CEO’s obligations include evaluating applications against the core criteria, publishing notices in the Gazette, and ensuring that the TCO does not disadvantage non-Commonwealth entities. The Act also implies that there are civil and criminal consequences for non-compliance, though the specific penalties are not detailed in the explanatory statement provided.