EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615443
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.
Komatsu applied for a TCO in respect of certain mobile soil reclaimers on 05 October 2006.
Instrument
TCO No 0615443 was made on 15 December 2006. It declares that those certain mobile soil reclaimers 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. 0615443 is taken to have come into force on 05 October 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 provide for the administration of customs and excise duties and related matters, including the provision of tariff concessions. The Tariff Concession Instrument No. 0615443 was introduced to provide a lower rate of customs duty on certain mobile soil reclaimers, following an application by Komatsu under section 269F of the Act. The instrument was made by the Chief Executive Officer of Customs, as authorised by section 269P of the Act, on the basis that no substitutable goods were produced in Australia, meeting the core criteria outlined in section 269C. The instrument came into force on the date the application was lodged, 5 October 2006, and does not affect the rights of persons in respect of anything done before the date of registration. The Tariff Concession Order provides a free rate of duty on these goods, benefiting importers who may apply for a refund of duty paid on such goods imported since the instrument's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative provision applies to any person or entity seeking a reduction in the customs duty on certain imported goods by applying for a TCO. The Act mandates that the CEO must determine if the goods in question meet the core criteria, which includes the absence of substitutable goods produced in Australia in the ordinary course of business on the day the application is lodged. Should the application meet these criteria, a TCO is issued, granting the specified goods a reduced rate of customs duty as outlined in the Customs Tariff Act 1995. The application of this Act is national, with the CEO's decisions impacting the importation of goods across Australia. Notably, the Act excludes certain goods from TCO eligibility as specified in section 269SJ, and the CEO is required to consult with the public through a Gazette notice when accepting a valid TCO application. The TCO does not retroactively affect the rights of any person, ensuring that existing duties are not imposed on past transactions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0615443, pursuant to the Customs Act 1901, revolve around the establishment and implementation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). These sections allow the Chief Executive Officer of Customs (CEO) to reduce the customs duty rate on specific goods if certain criteria are met. Specifically, section 269F allows a person to apply for a TCO in respect of goods, while section 269C stipulates that a TCO application 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. If the CEO determines that the application meets these criteria, section 269P(3) mandates that the CEO must make a written TCO order, declaring that the goods are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by this legislation primarily concern the CEO of Customs. Section 269K(1) requires the CEO to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any person who believes the TCO should not be made to lodge a submission. This ensures transparency and provides an opportunity for public input. Additionally, the CEO must ensure that the application meets the core criteria outlined in section 269C before issuing a TCO. The TCO itself, once issued, applies to the goods from the date the application was lodged, as per subsection 269S(1).
Any breaches or non-compliance with the requirements of the Customs Act 1901 related to the issuance of TCOs could result in civil or criminal consequences. Although the specific penalties for breach are not detailed in the provided text, the general framework of the Customs Act 1901 includes provisions for penalties, which can vary significantly depending on the nature and severity of the breach. Penalties may include fines or other sanctions for non-compliance, ensuring that the legislative intent of the TCO scheme is upheld. The potential for civil or criminal liability underscores the importance of adhering to the statutory requirements and obligations set forth in the Act.