EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703742
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.
Pilkington (Australia) Limited applied for a TCO in respect of certain glass handling sideloader works trucks on 09 March 2007.
Instrument
TCO No 0703742 was made on 02 July 2007. It declares that those certain glass handling sideloader works 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. 0703742 is taken to have come into force on 09 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 Tariff Concession Instrument No. 0703742, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods that are not produced in Australia, thereby ensuring that Australian industries are not unfairly disadvantaged. The Customs Act 1901 established a framework for tariff concessions that lower the customs duty on goods, provided certain criteria are met. The enacting body, the Chief Executive Officer of Customs, ensures that applications for tariff concession orders (TCOs) adhere to the legislative requirements, particularly focusing on whether substitutable goods are produced domestically. The policy objective is to protect Australian industries by ensuring that the concession only applies if no equivalent goods are manufactured locally, thereby preventing any competitive disadvantage.
The explanatory statement for Instrument No. 0703742 details the application process and the decision-making criteria, culminating in the issuance of a TCO for certain glass handling sideloader works trucks. This instrument was effective from the date the application was lodged, with no submissions received in opposition, and does not affect the rights of any person prior to its enactment. It aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0703742, made under the Customs Act 1901, applies to any entity or person seeking a tariff concession order for certain glass handling sideloader works trucks. The act extends to the entire Commonwealth of Australia and involves the process whereby the Chief Executive Officer of Customs decides on tariff concessions for specific goods based on criteria outlined in the Customs Act 1901. This includes ensuring that the goods in question are not substitutable by products manufactured in Australia and that no such substitutable goods are produced in Australia in the ordinary course of business. The instrument was made on 2 July 2007 and is effective as of the date the application was lodged on 9 March 2007, with no retroactive effect on existing duties or liabilities. The instrument does not affect the rights of any person other than the Commonwealth and does not impose new liabilities on any person, thereby ensuring that importers can apply for duty refunds on imports of the specified goods from the effective date of the tariff concession.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes the framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (s 269F). An application for a TCO can be made by any person seeking a reduced rate of customs duty on particular goods (s 269F). For a TCO to be issued, the CEO must determine that the application pertains to goods not listed in section 269SJ, which excludes certain goods from TCO eligibility (s 269SJ). The core criteria for a TCO application are met if, on the date the application was submitted, no substitutable goods were being produced in Australia in the ordinary course of business (s 269C). To meet these criteria, the CEO must also ascertain that the goods in question are not substitutable by Australian-made goods, as defined by sections 269D, 269E, and 269F of the Act. If the CEO is satisfied with the application's compliance with these criteria, they must issue a TCO, specifying the reduced customs duty rate applicable to the goods (s 269P(3)).
The obligations imposed by the Customs Act 1901 on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their application adheres to the requirements set out in the Act, particularly that the goods in question are not substitutable by Australian-made goods. The CEO, on the other hand, is obligated to review the application to verify that it meets the core criteria and to publish a notice in the Gazette inviting any interested parties to object to the TCO if they believe it should not be issued (s 269K(1)). If no objections are received, the CEO is required to issue the TCO. The Act also mandates that a TCO comes into force on the date the application is lodged (s 269S(1)), providing immediate tariff concessions to the applicant.
Under the Customs Act 1901, there are no direct offences or penalties specified for breaches related to TCO applications. However, any misuse of the TCO or failure to comply with the conditions set out in the Act could potentially lead to legal consequences. For example, if an entity falsely claims that certain goods are not substitutable by Australian-made goods, this could result in civil or criminal penalties under other sections of the Customs Act 1901 or related legislation. The maximum penalties for such offences can vary significantly, depending on the nature and severity of the breach, but can include substantial fines and, in some cases, imprisonment. The Act ensures that the rights of importers are beneficially affected by the TCO, and it explicitly states that the TCO does not impose any liabilities on any person, except the Commonwealth.