EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708773
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.
GMCAT Pty Ltd applied for a TCO in respect of certain cement mixers on 28 May 2007.
Instrument
TCO No 0708773 was made on 10 August 2007. It declares that those certain cement mixers 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. 0708773 is taken to have come into force on 28 May 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, establishes a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. This legislative instrument addresses the need for economic incentives and the facilitation of trade by allowing certain goods to enter Australia with reduced or no customs duty, provided they meet specific criteria such as the absence of substitutable goods produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0708773, issued on 10 August 2007, pertains to an application by GMCAT Pty Ltd for a TCO on certain cement mixers. The instrument declares these mixers eligible for a zero-duty rate, effective from 28 May 2007, the date of the application, with no adverse impact on the rights of any person other than the Commonwealth. The policy objective here is to ensure that the import of these goods is facilitated without imposing new liabilities or disadvantaging existing rights holders.
Scope and Application
The Tariff Concession Instrument No. 0708773, made under Part XVA of the Customs Act 1901, applies to individuals and entities seeking a tariff concession order (TCO) for specific goods that meet certain criteria, such as the absence of substitutable goods produced in Australia. This legislation allows for a lower rate of customs duty for the specified goods, as outlined in the instrument. The application of the TCO is governed by the Customs Act 1901 and is subject to the core criteria set out in section 269C of the Act, which must be met for the concession to be granted. The instrument itself does not explicitly mention any exclusions, exemptions, or thresholds beyond those outlined in the core criteria. The TCO is effective from the date the application was lodged, in this case, 28 May 2007. The instrument does not affect any existing rights or impose new liabilities on persons other than the Commonwealth. The scope of the legislation is national, as it is enacted under the Commonwealth Customs Act 1901 and applies across Australia. The instrument may be further detailed or extended through subordinate instruments or regulations, but no such extensions are mentioned in the explanatory statement.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0708773, under the Customs Act 1901 (the Act), concern the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO). Section 269F allows an application for a TCO to be made to the CEO in respect of certain goods. If the application is valid, and the goods are not specified in section 269SJ, which details goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria (section 269C). If these criteria are met, the CEO is required to make a written order, a TCO, specifying that the goods in question are subject to a prescribed rate of customs duty (subsection 269P(3)).
Under this instrument, the CEO must ensure that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged, as per section 269C. This means that if the goods for which a TCO is sought are not being produced in Australia, and there are no suitable alternatives available, the application is likely to meet the core criteria. In the case of TCO No. 0708773, the CEO found that no substitutable goods were produced in Australia in relation to certain cement mixers, leading to the issuance of the TCO.
The obligations imposed on the parties governed by this Act include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). Additionally, the TCO does not affect the rights of any person other than the Commonwealth in respect of anything done or omitted before the date of registration (subsection 269S(3)). Importers of the goods subject to the TCO may apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.
Any breach of the provisions under the Customs Act 1901 may result in various civil and criminal consequences. Offences and penalties can include fines and imprisonment, though the specific maximum penalties are not detailed in this explanatory statement. The precise legal ramifications of non-compliance would be subject to other relevant sections of the Act and any associated regulations or guidelines.