EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710022
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.
Hard Metal Industries Pty Ltd applied for a TCO in respect of certain foundation drilling machine parts on 27 June 2007.
Instrument
TCO No 0710022 was made on 07 September 2007. It declares that those certain foundation drilling machine parts 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. 0710022 is taken to have come into force on 27 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, establishes a framework for administering customs and excise duties, including the ability to make Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument was introduced to address the need for concessional tariffs on specific imported goods where domestic production is insufficient or non-existent, thereby supporting industry competitiveness and economic efficiency. Tariff Concession Instrument No. 0710022, made under this Act, aims to provide a zero rate of customs duty on certain foundation drilling machine parts, effective from 27 June 2007, the date the application was lodged. The decision to grant this concession was made by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, meeting the core criteria set out in the Act. The policy objective is to facilitate the import of these parts without incurring customs duty, benefiting the industry by reducing costs and promoting economic activity.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) through the authority of the Chief Executive Officer of Customs (CEO). This legislation applies to individuals and entities that seek tariff concessions for goods that are not substitutable by Australian-produced goods, thereby qualifying for a lower rate of customs duty. The scope of the Act is national, operating within the Commonwealth of Australia and affecting all entities and individuals involved in the importation of goods eligible for tariff concessions. The Act excludes certain goods, as specified in section 269SJ, from the possibility of a TCO. The application process requires satisfying core criteria, including the absence of substitutable goods produced in Australia, as defined by sections 269C, 269D, 269E, and 269P(3). The TCO No. 0710022, effective from 27 June 2007, pertains to specific foundation drilling machine parts and declares these goods as eligible for a zero duty rate, which contrasts with the standard 5% duty rate. The CEO’s decision to issue the TCO was made after a public notice and consultation period yielded no objections. This instrument does not retroactively disadvantage any party or impose liabilities for actions taken prior to its registration.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0710022, as detailed in the Explanatory Statement, involve the granting of tariff concessions for specific goods, in this case, certain foundation drilling machine parts. Section 269F of the Customs Act 1901 allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria outlined in section 269C, which includes the condition that no substitutable goods are produced in Australia, a TCO is issued. Section 269P(3) specifies that a written order declaring the goods subject to a lower customs duty rate is issued if the application is deemed valid. In this particular instance, Hard Metal Industries Pty Ltd applied for and was granted a TCO for certain foundation drilling machine parts, effective from 27 June 2007.
The obligations imposed by the Act on the parties involved, particularly Hard Metal Industries Pty Ltd and the CEO, are to ensure that the application for a TCO is made in accordance with the stipulated criteria. The CEO must assess whether the application meets the core criteria, including verifying that no substitutable goods are produced in Australia. Once the CEO is satisfied with the application, they must publish a notice in the Gazette inviting any objections to the TCO, as outlined in section 269K(1). In this case, no objections were received. The CEO's duty also involves making a written order if the application is valid, as mandated by section 269P(3).
The legislation also outlines potential consequences for non-compliance. While the Explanatory Statement does not specify any particular offences or penalties for breaches of the TCO provisions, it is reasonable to infer that any misuse or fraudulent claims in the application process could lead to civil or criminal penalties under the broader Customs Act 1901. These could include fines or imprisonment, depending on the severity of the breach. The specifics of penalties would be determined in accordance with the general provisions of the Customs Act, which include potential fines and imprisonment for offences related to the importation and exportation of goods. The explanatory statement does not provide maximum penalties but refers to the overarching legislative framework for enforcement.