EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700681
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.
The Trustees for the Collins No 2 Family Trust applied for a TCO in respect of certain rough terrain cranes on 12 January 2007.
Instrument
TCO No 0700681 was made on 30 March 2007. It declares that those certain rough terrain 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 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. 0700681 is taken to have come into force on 12 January 2007.
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 amended to include Part XVA, which introduced a scheme for Tariff Concession Orders (TCOs) to provide relief on customs duties for certain goods. The 2007 explanatory statement details the process and criteria for these concessions. A TCO application can be made to the Chief Executive Officer of Customs (CEO) if the goods do not fall under the categories ineligible for such concessions as outlined in section 269SJ of the Act. The CEO must determine if the application meets the core criteria, primarily that no substitutable goods are produced in Australia at the time of application, as stipulated in section 269C. This instrument, specifically TCO No. 0700681, was enacted to provide a tariff concession for certain rough terrain cranes, reducing their duty rate to free, down from the general rate of 5%. The Trustees for the Collins No 2 Family Trust applied for this concession on 12 January 2007, and it was granted on 30 March 2007, becoming effective from the application date. The CEO published a notice inviting objections to the TCO in the Gazette, but no submissions were received. The TCO was designed to benefit importers by allowing them to apply for a refund of duties on the specified goods imported since the effective date, without imposing any new liabilities on other parties.
Scope and Application
The Tariff Concession Instrument No. 0700681, made under the Customs Act 1901, applies to any person who applies for a Tariff Concession Order (TCO) in respect of goods. This includes entities and individuals seeking to import specified goods, such as certain rough terrain cranes, into Australia. The application of the Act extends to the Commonwealth jurisdiction and operates on a national level, as the Act is a Commonwealth statute. The Act provides for the CEO of Customs to issue TCOs which offer lower rates of customs duty on goods specified in the order, provided the goods are not substitutable by products manufactured in Australia. Exclusions include goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act allows for the scope of application to be extended or restricted through subordinate instruments, though the primary focus of the Act is on ensuring that no substitutable goods are produced in Australia in the ordinary course of business when a TCO is being considered. The commencement of the TCO is retroactive to the date of the application, thereby not affecting pre-existing rights or imposing liabilities for actions taken prior to the registration date.
Key Provisions
The primary operative sections of this legislation focus on the creation and application of Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act 1901. Section 269F allows individuals or entities to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. Section 269C stipulates that a TCO application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods, as defined in section 269D, are those produced in Australia that can serve the same purpose as the goods for which the TCO is sought. The CEO must then issue a written order (section 269P(3)) if satisfied that the application meets the core criteria, declaring the goods subject to a specified rate in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. If the CEO is satisfied that the application meets the core criteria, they are required to make a TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette (section 269K(1)) inviting any interested parties to submit objections to the TCO if they believe it should not be granted. In this case, no submissions were received, which facilitated the issuance of TCO No. 0700681.
Any breach of the obligations or requirements set forth in the Customs Act 1901 may result in civil or criminal consequences. While specific offences and penalties are not detailed in this explanatory statement, breaches of customs legislation generally carry significant penalties. These can include fines and, in more severe cases, imprisonment. The maximum penalties would depend on the specific nature and severity of the breach, as outlined in other sections of the Customs Act and associated regulations. Importers, however, stand to benefit from any TCOs granted, potentially receiving refunds on duties paid on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.