EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708774
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 0708774 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. 0708774 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 was enacted to facilitate trade by regulating the import and export of goods, among other purposes. The Act was introduced to address the need for a systematic approach to customs duties and to manage the flow of goods across Australia's borders. One of the mechanisms introduced under the Act is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duties on specific goods under certain conditions. The Tariff Concession Instrument No. 0708774, made in 2007, exemplifies this mechanism by granting a tariff concession for certain cement mixers, effectively reducing their duty from 5% to free. This concession was made after the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, satisfying the core criteria under section 269C of the Act. The policy objective is to support Australian industries by providing tariff relief where appropriate, thereby potentially fostering local production and reducing costs for importers.
Scope and Application
The Tariff Concession Instrument No. 0708774 under the Customs Act 1901 pertains to the application of tariff concessions on specific goods, in this case, certain cement mixers. This instrument applies to any entity or individual seeking tariff concessions on these goods. The geographic reach of this legislation is national, as it falls under the Commonwealth’s authority. The Act applies to the conduct of importing these goods and the transactions associated with them. According to the Act, a Tariff Concession Order (TCO) can be made by the Chief Executive Officer of Customs if the application for the concession meets the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business. The application of the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person. The TCO was published in the Gazette with an invitation for submissions, but none were received. The TCO is taken to have come into force on the date the application was lodged, which in this case was 28 May 2007. The Act may extend or restrict its application through subordinate instruments, though specific details are not provided in the text.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0708774 under the Customs Act 1901, include section 269C, which outlines the core criteria that a Tariff Concession Order (TCO) application must meet. According to section 269C, for a TCO to be considered, there must be no substitutable goods produced in Australia on the day the application was lodged. Section 269P(3) further mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these core criteria, they must issue a written TCO. This order, as detailed in section 269P(3), declares the goods to which a specific item of Schedule 4 to the Customs Tariff Act 1995 applies, thus altering the customs duty rate for those goods. For example, in the case of the cement mixers, the general duty rate of 5% was reduced to free under TCO No. 0708774, effective from the date of the application, 28 May 2007.
The Customs Act 1901 imposes several obligations on the parties involved, primarily the applicant and the CEO. The applicant, such as GMCAT Pty Ltd in this instance, must ensure their application meets the core criteria, specifically demonstrating that no substitutable goods are produced in Australia on the day of application. The CEO, on the other hand, has the duty to evaluate the application against these criteria and, if satisfied, issue a TCO. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, no submissions were received, facilitating the CEO's decision to proceed with the TCO.
In terms of consequences for breach, the Customs Act 1901 does not explicitly state penalties for failing to meet the core criteria or for providing false information in a TCO application. However, the Act does provide for general penalties for breaches related to customs duties. For instance, under the Crimes Act 1914, providing false or misleading information to a Commonwealth official can result in significant fines and imprisonment. Although the specific penalties are not detailed in the TCO legislation, the potential legal repercussions underscore the importance of accuracy and compliance in TCO applications.