EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618566
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.
Pacific Materials Handling applied for a TCO in respect of certain material handlers on 16 November 2006.
Instrument
TCO No 0618566 was made on 9 February 2007. It declares that those certain material handlers 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. 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. 0618566 is taken to have come into force on 16 November 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, establishes a framework for the imposition of customs duties on imported goods. Among other provisions, Part XVA of the Act allows the Chief Executive Officer (CEO) of Customs to grant Tariff Concession Orders (TCOs) that reduce the rate of customs duty on certain goods. This legislative measure addresses the gap in providing tariff relief to industries that cannot compete domestically with imported goods, thereby supporting economic efficiency and competitiveness. The objective of the TCO process, as outlined in the Act, is to ensure that TCOs are granted only when no substitutable goods are produced in Australia in the ordinary course of business. In line with this policy, Tariff Concession Instrument No. 0618566 was issued on 9 February 2007, following an application by Pacific Materials Handling for a TCO on specific material handlers, which resulted in a reduction of customs duty from 5% to 0%.
Scope and Application
The Tariff Concession Instrument No. 0618566, made under Part XVA of the Customs Act 1901, applies to any person or entity seeking tariff concessions on specific goods imported into Australia. This Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the customs duty on goods provided that certain conditions are met, such as the absence of substitutable goods produced in Australia. The application of this Act is primarily focused on the goods themselves and the industries involved in their importation, aiming to support sectors by reducing the financial burden of customs duties on specified items. Geographically, the Act operates under the Commonwealth jurisdiction, applying nationally across Australia. It does not, however, extend to goods listed in section 269SJ of the Act, which are explicitly excluded from tariff concessions. The TCO may be further extended or restricted through subordinate instruments, although this particular instance, TCO No. 0618566, specifically relates to certain material handlers, with the application of the order affecting the rates from the date the application was lodged, namely 16 November 2006.
Key Provisions
The main operative sections of this legislation (F2007L00533) include sections 269C, 269F, 269P(3), and 269K(1) of the Customs Act 1901. Section 269F allows an application for a Tariff Concession Order (TCO) to be made to the Chief Executive Officer (CEO) of Customs, provided the goods in question are not listed in section 269SJ, which specifies those goods that cannot be subject to a TCO. The CEO must determine whether the application meets the core criteria, as defined in section 269C, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. If these criteria are met, the CEO must issue a written TCO, as mandated by section 269P(3). Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made.
The obligations imposed by the Act on the parties involved are significant. For applicants such as Pacific Materials Handling, the primary obligation is to ensure that their application for a TCO is complete and meets the criteria set out in section 269C. The CEO of Customs has the obligation to assess the application against these criteria and to make a decision based on the information provided. Should the application meet the criteria, the CEO must issue a TCO and ensure that it is published in the Gazette, providing an opportunity for any interested parties to lodge submissions. The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on any person for actions taken prior to the TCO's effective date.
In terms of consequences for breach, the Act does not explicitly outline specific offences or penalties for failing to comply with the TCO provisions. However, the Customs Act 1901 and related regulations do include provisions for penalties in cases of non-compliance with customs laws. Generally, non-compliance with customs regulations can result in financial penalties, with the maximum penalty often determined by the severity and frequency of the offence. For instance, under the Crimes Act 1914, significant breaches of customs regulations can result in substantial fines and imprisonment, depending on the circumstances and the discretion of the court. The specific penalties for breaches related to TCOs would be guided by these overarching provisions and the specific details of any non-compliance.