EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708680
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.
Sandvik Mining and Construction Adelaide Ltd applied for a TCO in respect of certain cable stringer trucks on 07 June 2007.
Instrument
TCO No 0708680 was made on 17 August 2007. It declares that those certain cable stringer 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. 0708680 is taken to have come into force on 07 June 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, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) which allow for the reduction or exemption of customs duties on certain goods. The problem or gap addressed by this Act is to facilitate the import of specific goods by reducing the financial burden on importers when no substitutable goods are produced in Australia. F2007L02718 is a Tariff Concession Order made under this Act, specifically for certain cable stringer trucks, following an application by Sandvik Mining and Construction Adelaide Ltd. The order was made by the Chief Executive Officer of Customs on 17 August 2007, and it came into effect on 7 June 2007, the day the application was lodged. The order aims to ensure that the application meets the core criteria set out in the Act, specifically that no substitutable goods were produced in Australia, thereby allowing for a tariff concession and a reduction in the duty rate from the general rate of 5% to free.
Scope and Application
The Customs Act 1901, through its Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) which lower the rate of customs duty on specified goods. This mechanism is designed to benefit certain entities, particularly importers, by allowing them to apply for reduced duty rates on goods not produced in Australia and for which no substitutable goods are available domestically. The scope of this legislation applies to any person or entity that meets the criteria set forth in section 269C of the Act and can successfully demonstrate that the goods in question are not produced in Australia and do not have a substitutable domestic counterpart, as defined in sections 269D and 269E of the Act. The application process and subsequent TCO, such as Tariff Concession Order No. 0708680, are administered by the Chief Executive Officer of Customs and are subject to the geographic reach of the Commonwealth of Australia. Notably, the Act excludes certain goods from TCO consideration, as outlined in section 269SJ, and the CEO has the authority to make further orders or modify existing ones through subordinate instruments, ensuring flexibility and responsiveness to changing economic and market conditions.
Key Provisions
The Customs Act 1901, particularly under Part XVA, outlines the procedures for creating Tariff Concession Orders (TCOs), which provide reduced customs duty rates on specific goods. When an individual or entity applies for a TCO (section 269F), the Chief Executive Officer of Customs (CEO) must first ensure the application pertains to goods that are not excluded by section 269SJ. If the application is valid, the CEO then evaluates whether it meets the core criteria set out in section 269C. This involves determining if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If these criteria are satisfied, the CEO issues a written TCO (section 269P(3)), specifying the goods and the applicable lower duty rate from Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on applicants and the CEO are clear and structured. Applicants must submit a valid TCO application, ensuring it pertains to goods not excluded by section 269SJ. The CEO is obligated to assess the application's validity and compliance with the core criteria. If the application meets these criteria, the CEO must publish a notice in the Gazette inviting objections (subsection 269K(1)), and then make the TCO if no objections are received. This process ensures transparency and provides an opportunity for interested parties to voice their concerns. In this particular case, Sandvik Mining and Construction Adelaide Ltd applied for a TCO for certain cable stringer trucks, which was subsequently granted, as no substitutable goods were being produced in Australia at the time.
The Act also delineates consequences for non-compliance with its provisions. While the Explanatory Statement does not specify detailed penalties for breaches of the Act, it is understood that breaches of customs regulations generally attract significant penalties. These may include fines, imprisonment, or both, depending on the severity and intent of the breach. The specific penalties would be determined according to the broader provisions of the Customs Act 1901 and related legislation. The TCO itself, however, does not impose any liabilities on individuals or entities other than the Commonwealth and protects the rights of importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date.