EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607234
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.
Bucyrus (Australia) Pty Ltd applied for a TCO in respect of certain two reduction planetary gearboxes on 20 April 2006.
Instrument
TCO No 0607234 was made on 14 July 2006. It declares that those certain two reduction planetary gearboxes 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 10%. 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. 0607234 is taken to have come into force on 20 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 facilitate the regulation and management of imports and exports in Australia, establishing a framework for the administration of customs duties and tariffs. One of the mechanisms introduced by the Act is the scheme for Tariff Concession Orders (TCOs), which provides for reduced rates of customs duty on specified goods. The Act was enacted by the Australian Parliament and aims to ensure efficient trade practices while generating revenue through customs duties. The Tariff Concession Instrument No. 0607234, made under the Customs Act 1901, was introduced to address the specific issue of granting tariff concessions for certain goods, in this case, two reduction planetary gearboxes, upon application by Bucyrus (Australia) Pty Ltd. The explanatory statement notes that the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia at the time of the application, thus satisfying the core criteria for the concession. The policy objective is to promote efficient trade by reducing the cost of importing certain goods, thereby benefiting importers and potentially enhancing competitive advantage in the market.
Scope and Application
The Tariff Concession Instrument No. 0607234, enacted under the Customs Act 1901, applies to entities and individuals involved in the importation of certain two reduction planetary gearboxes, specifying a concessionary rate of customs duty for these goods. This instrument is effective on the date the application was lodged, which is 20 April 2006. The application of this Instrument is limited to the Commonwealth jurisdiction and specifically targets the reduction of customs duties for goods that do not have substitutable Australian-produced alternatives, as per the outlined criteria in the Act. The Instrument was made following an application by Bucyrus (Australia) Pty Ltd and is applicable to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the general duty rate from 10% to free. The scope of the Instrument is confined to the specified goods and does not extend to any other goods or entities unless similarly situated, nor does it affect the rights of any person with respect to actions taken before the Instrument's effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0607234 under the Customs Act 1901 (section 269F) pertain to the application and processing of Tariff Concession Orders (TCOs). A person can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods (section 269F). If the application is not in respect of goods specified in section 269SJ of the Act and meets the core criteria in section 269C, the CEO must make a written order (section 269P(3)). This order specifies 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 applies, thereby reducing the duty rate for these goods.
The Act imposes several obligations on the parties involved. The CEO must ensure that any application for a TCO is not in respect of goods listed in section 269SJ, which are ineligible for TCOs. The CEO must also verify that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269C, 269D, and 269E. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (section 269K(1)). In this case, the CEO did not receive any submissions.
Under the Customs Act, breaches of the provisions related to TCOs may result in civil or criminal penalties, although the specific penalties are not detailed in the text provided. The Act generally provides for penalties for offences related to customs duties, which may include fines and imprisonment for more serious offences. The maximum penalties would be determined by the specific nature of the breach and the applicable laws.
The Tariff Concession Instrument No. 0607234, which came into force on 20 April 2006, does not disadvantage any person or impose liabilities on them in respect of anything done or omitted before the date of registration. Importers of the goods subject to the TCO will benefit from the reduced duty rate and can apply for a refund of duty on goods imported since the effective date of the TCO (Regulation 126(1)(r)). This ensures that the rights of importers are positively affected without imposing any additional liabilities.