EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709772
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.
Citywide Service Solution applied for a TCO in respect of certain asphalt mixing plant on 22 June 2007.
Instrument
TCO No 0709772 was made on 7 September 2007. It declares that those certain asphalt mixing plant 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. 0709772 is taken to have come into force on 22 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, established a framework for the regulation of customs duties and related matters. This legislation includes the provision for Tariff Concession Orders (TCOs) under Part XVA, which are designed to reduce the customs duty on certain goods if specific criteria are met. The introduction of TCOs addresses the need for flexibility in the application of customs duties, particularly to support industries that may face challenges from locally produced substitutes. The policy objective is to provide economic relief to industries that import specific goods for which there are no substitutable Australian-made alternatives, thereby supporting these industries in maintaining competitive prices and encouraging continued investment in Australia. Instrument TCO No. 0709772, issued on 7 September 2007, is an example of how this mechanism can be applied to provide a tariff concession for certain asphalt mixing plant, reducing the duty rate from 5% to 0% based on the absence of substitutable Australian-made goods.
Scope and Application
The Tariff Concession Instrument No. 0709772, under the Customs Act 1901, pertains to the application of a Tariff Concession Order (TCO) for certain asphalt mixing plant equipment. The Act applies to any person or entity seeking a tariff concession for goods that are not substitutable by goods produced in Australia. The scope of the legislation is specifically to provide a mechanism whereby the Chief Executive Officer of Customs can make a TCO, thereby applying a lower rate of customs duty to certain goods. The application of this Act is national, operating within the Commonwealth jurisdiction of Australia. Notably, the Act excludes any goods specified in section 269SJ of the Customs Act 1901, which lists those goods that cannot be subject to a TCO. The Act allows for the extension of its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to the goods subject to a TCO. The commencement of this particular TCO, effective from 22 June 2007, ensures that no person, except the Commonwealth, is disadvantaged or imposed liabilities for actions taken prior to the registration date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0709772 under the Customs Act 1901 (section 269F) detail the process for the Chief Executive Officer of Customs (the CEO) to make a Tariff Concession Order (TCO) for certain goods, such as the asphalt mixing plant in this case. Once an application is made, the CEO must determine whether it meets the core criteria, which include ensuring no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied, a written order is made, declaring the specified goods to be subject to a prescribed tariff item (section 269P(3)). In this instance, the TCO declares that the asphalt mixing plant is subject to a 0% duty rate, down from the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The obligations imposed by the Act on parties or entities it governs are primarily on the CEO. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the TCO (subsection 269K(1)). Additionally, the CEO must ensure that the application meets the core criteria, which include verifying the non-production of substitutable goods in Australia. In this case, the CEO determined that the application for the asphalt mixing plant met the criteria, leading to the issuance of TCO No. 0709772.
The consequences for breaches of the Act or the TCO are not explicitly detailed in the explanatory statement. However, the Customs Act 1901 generally provides for various offences and penalties. For instance, under section 235-10 of the Act, persons found guilty of attempting to evade duty or otherwise contravene the Act may face fines or imprisonment. The penalties can vary significantly depending on the severity and intent behind the breach. In the context of this TCO, any misuse or non-compliance with the concession terms could potentially lead to such penalties, though specific consequences for this TCO are not outlined in the explanatory statement.