EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612614
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.
Merlo Group Australia Pty Ltd applied for a TCO in respect of certain concrete-mixer trucks on 28 July 2006.
Instrument
TCO No 0612614 was made on 20 October 2006. It declares that those certain concrete-mixer trucks 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. 0612614 is taken to have come into force on 28 July 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 Tariff Concession Instrument No. 0612614, enacted in 2006, was introduced to provide relief under the Customs Act 1901 by reducing or eliminating customs duties on certain specified goods. The instrument was created in response to an application from Merlo Group Australia Pty Ltd for tariff concessions on concrete-mixer trucks, as there were no substitutable goods produced in Australia at the time. The Australian Customs and Border Protection Service, under the authority of the Chief Executive Officer of Customs, is the enacting body responsible for issuing such tariff concession orders. The policy objective is to encourage the importation of goods where domestic alternatives are not available, thereby supporting industries that rely on imported materials or components and potentially lowering costs for businesses and consumers.
The instrument operates by declaring that the concrete-mixer trucks in question are subject to a zero rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from the date the application was lodged. This tariff concession aims to benefit importers by potentially allowing them to claim refunds on duties paid prior to the effective date of the concession. The instrument was published in the Gazette to invite any objections, but none were received, and it came into force on 28 July 2006, without disadvantaging any existing rights or imposing new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0612614, made under the Customs Act 1901, applies to the importation of certain concrete-mixer trucks into Australia. It provides for a tariff concession that effectively grants these goods a duty-free status, as long as the application meets the specified core criteria, such as the absence of substitutable goods produced in Australia. This instrument is applicable to any person or entity seeking to import these concrete-mixer trucks. The instrument extends to the national jurisdiction of Australia and is effective from the date the application for the tariff concession was lodged, which in this case is 28 July 2006. The instrument does not affect any pre-existing rights of individuals or entities other than the Commonwealth and does not impose any liabilities on such parties for actions taken prior to the issuance of the instrument. The scope of the instrument can be further extended or modified through subordinate instruments as deemed necessary by the Chief Executive Officer of Customs.
Key Provisions
The Customs Act 1901 (the Act) provides for the creation of Tariff Concession Orders (TCOs) under section 269F, which can be applied for by any person. Section 269C stipulates that an application for a TCO meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The term "substitutable goods" is defined in section 269D, "ordinary course of business" in section 269E, and the application process is further clarified in section 269P, where it is stated that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
The obligations imposed by the Act on the parties involved, particularly the CEO, are to ensure that the application for a TCO is assessed against the core criteria and to make a decision based on whether the goods specified in the application are not substitutable by goods produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may wish to argue against the making of the TCO, as per subsection 269K(1) of the Act. This transparency measure ensures that the process is open and accountable, allowing for any potential objections to be considered before a TCO is made.
In terms of potential breaches and consequences, the Act does not explicitly outline specific offences or penalties for failing to comply with the requirements for TCOs. However, any failure to adhere to the stipulated processes or to provide accurate information in an application could potentially result in the CEO not making the TCO, which would leave the applicant without the tariff concession they sought. Additionally, if a TCO is made in error, the CEO retains the ability to revoke the TCO under section 269R of the Act. This corrective measure ensures that any improper concessions are rectified to maintain the integrity of the customs duty system.