EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703439
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.
Le Tourneau Technologies applied for a TCO in respect of certain wheel loader parts on 2 March 2007.
Instrument
TCO No 0703439 was made on 25 May 2007. It declares that those certain wheel loader parts 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. 0703439 is taken to have come into force on 2 March 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, enacted by the Australian Parliament, established a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This legislative framework was designed to address the need for a streamlined process to grant tariff concessions on imported goods, which was achieved through the application process outlined in the Act. The explanatory statement for Tariff Concession Instrument No. 0703439, issued under this Act, indicates that the instrument was made in response to an application from Le Tourneau Technologies for tariff concessions on certain wheel loader parts. The instrument declares that these parts are subject to a 0% duty rate, as no substitutable goods were produced in Australia at the time of the application. The objective of this concession is to facilitate the import of these goods without imposing any disadvantage or additional liabilities on importers, thereby ensuring a beneficial effect on their rights.
Scope and Application
The Tariff Concession Instrument No. 0703439, under the Customs Act 1901, applies to specific goods, namely certain wheel loader parts, which are subject to a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs. This legislation is designed for entities and individuals involved in the importation of these specified goods, providing them with a concession on the applicable customs duty rate. The TCO applies nationally across Australia and is governed under the Commonwealth jurisdiction. The Act excludes certain goods from being subject to a TCO as per section 269SJ, which lists those goods that are ineligible for tariff concessions. The scope of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which outlines the specific tariff rates applicable to various goods, including those affected by the TCO. The TCO in question became effective on the date the application was lodged, 2 March 2007, and does not impose any liabilities on persons other than the Commonwealth nor disadvantage any person in respect of actions taken before its registration.
Key Provisions
The Customs Act 1901 provides a framework for the creation of Tariff Concession Orders (TCOs), which can reduce the customs duty on certain goods. Section 269F (1) allows individuals or entities to apply to the Chief Executive Officer of Customs (CEO) for a TCO for specific goods. Once the application is deemed valid and not concerning goods excluded under section 269SJ, the CEO assesses if it meets the core criteria set out in section 269C. For a TCO to be granted, it must be established that no substitutable goods are produced in Australia on the date the application is lodged, as per section 269P(3). This involves ensuring that the goods in question do not have an Australian equivalent that could be used in the same manner, which is further defined in sections 269D, 269E and 269F of the Act.
The obligations placed on parties by the Act include the requirement for the CEO to publish a notice in the Gazette, inviting submissions on the proposed TCO as per subsection 269K(1). This step ensures transparency and allows stakeholders to voice any objections. The CEO must then consider these submissions before making a decision. Additionally, the Act mandates that TCOs must not disadvantage any person other than the Commonwealth or impose liabilities on any person regarding actions taken before the TCO's effective date, as outlined in subsection 269S(1). This protects existing rights and obligations of parties not associated with the Commonwealth.
Failure to comply with the requirements set forth in the Customs Act 1901 may result in legal consequences. While the explanatory statement does not detail specific offences or penalties, it is implied that any breaches of the Act's provisions could lead to civil or criminal liability. The exact penalties would depend on the nature and severity of the breach, but they could range from fines to more severe penalties, including imprisonment, as outlined in other sections of the Act and related regulations. The implications of non-compliance underscore the importance of adhering to the legislative requirements for the proper administration of TCOs.