EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607100
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.
P&O Ports Ltd applied for a TCO in respect of certain rubber tyred gantry cranes on 18 April 2006.
Instrument
TCO No 0607100 was made on 1 September 2006. It declares that those certain rubber tyred gantry cranes 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. One submission objecting to the TCO application was received from Perini and Scott (A/Asia) Pty Ltd.
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. 0607100 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, enacted by the Parliament of Australia, addresses the need to provide tariff concessions for certain goods to encourage trade and economic activity. Specifically, the Act allows for the application of lower rates of customs duty to goods that are the subject of a Tariff Concession Order (TCO). The process involves an application by an interested party to the Chief Executive Officer of Customs, who then assesses whether the application meets the core criteria, primarily focusing on whether substitutable goods are produced in Australia. Tariff Concession Instrument No. 0607100, introduced on 1 September 2006, pertains to a TCO application by P&O Ports Ltd for certain rubber-tyred gantry cranes. The instrument declares that these cranes are subject to a 0% duty rate, as no substitutable goods are produced in Australia. This initiative aims to provide a policy objective of facilitating trade by reducing import costs for specific goods, thereby potentially benefiting importers through duty refunds for goods imported since the TCO came into effect on 18 April 2006.
Scope and Application
The Tariff Concession Instrument No. 0607100 under the Customs Act 1901 applies to specific rubber tyred gantry cranes as the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. The legislation allows for a lower rate of customs duty on goods that are the subject of a TCO, provided certain criteria are met, including that no substitutable goods are produced in Australia. The TCO was made following an application by P&O Ports Ltd on 18 April 2006, and the concession applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the duty rate from 5% to 0%. The instrument is effective as of the date of the application, and while it does not disadvantage existing rights or impose new liabilities, it does provide benefits to importers by allowing them to apply for a refund of duty paid on the goods since the effective date. The Act extends its application through subordinate instruments such as the TCOs, which are subject to the core criteria outlined in the Customs Act 1901.
Key Provisions
The Tariff Concession Instrument No. 0607100, under the Customs Act 1901, is an order made by the Chief Executive Officer (CEO) of Customs, which provides for a tariff concession on certain rubber tyred gantry cranes. According to section 269F, an application for a Tariff Concession Order (TCO) can be made by any person, and if the CEO is satisfied that the application is valid, they must assess whether it meets the core criteria outlined in sections 269C, 269D and 269E. In this case, the CEO was satisfied that no substitutable goods were produced in Australia, and subsequently issued TCO No. 0607100 on 1 September 2006, which applies to the specific rubber tyred gantry cranes mentioned, and reduces the duty rate from the general rate of 5% to 0% (section 269P(3)).
The TCO imposes certain obligations on the parties it governs. Specifically, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). In this case, Perini and Scott (A/Asia) Pty Ltd lodged a submission objecting to the TCO application. Additionally, 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 (subsection 269S(1)). Instead, the rights of importers will be beneficially affected, as they 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 (paragraph 126(1)(r) of the Regulations).
Failure to comply with the provisions of the TCO may result in various civil or criminal consequences, as outlined in the Customs Act 1901. However, the explanatory statement does not provide specific information regarding the offences, penalties, or consequences for breach of the TCO. It is important to note that the Customs Act 1901 includes various provisions for penalties and consequences for breaches of its provisions, and these may apply to the TCO as well. For instance, section 228 of the Customs Act 1901 provides for penalties for false statements or representations made in relation to goods, while section 233A provides for penalties for evading customs duty or other charges. The maximum penalties for these offences can range from fines to imprisonment, depending on the severity of the offence. It is essential for parties governed by the TCO to comply with its provisions to avoid any potential legal consequences.