EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710093
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 road header and tunnelling machine parts on 27 June 2007.
Instrument
TCO No 0710093 was made on 07 September 2007. It declares that those certain road header and tunnelling 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. 0710093 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 Parliament of Australia, provides a framework for the regulation of imports and exports, including the imposition of customs duties on imported goods. The Act was introduced to address the need for a systematic approach to managing international trade and protecting domestic industries. One of the mechanisms under the Act is the ability to grant tariff concession orders (TCOs) to reduce customs duty on certain goods, provided specific criteria are met. The 2007 Tariff Concession Instrument No. 0710093 was introduced to address the specific needs of Hard Metal Industries Pty Ltd, which applied for a TCO for certain road header and tunnelling machine parts. The instrument declares these parts as subject to a free rate of duty, as no substitutable goods were produced in Australia at the time of the application. This legislative measure ensures that the rights of importers are beneficially affected, allowing them to apply for refunds of duty on goods imported since the TCO's effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines a scheme that allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which reduce the customs duty for certain goods. The Act applies to any person or entity that seeks to import goods and benefits from the reduced duty rates when the conditions of the TCO are met. This scheme has a national reach, as it is administered under the Commonwealth's authority. A TCO can be applied for if the goods in question are not specified in section 269SJ, which lists goods ineligible for concession, and if the core criteria are satisfied. These criteria include the absence of substitutable goods produced in Australia in the ordinary course of business. The application process involves publishing a notice in the Gazette and considering any submissions received. In the case of TCO No. 0710093, concerning certain road header and tunnelling machine parts, the order came into force on the date of the application, 27 June 2007, and provides a free rate of duty, previously at 5%, benefiting importers who can also apply for duty refunds for imports made since the effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO) (section 269F). When an application is submitted for a TCO, the CEO is mandated to assess whether the application complies with the core criteria outlined in the Act. If the application is for goods that are not specified in section 269SJ of the Act, and it is established that no substitutable goods were produced in Australia at the time of application, the CEO is required to issue a written order granting the tariff concession (section 269C and 269P(3)).
The obligations imposed by the Act on the parties involved are primarily centred around the application process and the conditions for receiving a tariff concession. The applicant must ensure that the goods in question do not have any substitutable equivalents being produced in Australia at the time of the application. The CEO, on the other hand, is obligated to assess the application against the stipulated criteria and, if satisfied, to publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). Following the assessment and any subsequent consultation, the CEO must make a decision on the application and, if appropriate, issue the TCO.
Failure to comply with the provisions of the Act, including providing false information in an application or submitting an application for goods that are not eligible for a TCO, can lead to various civil and criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, it is reasonable to infer that such breaches could result in fines or other penalties as prescribed under the relevant sections of the Customs Act 1901 or associated regulations. The Act does not specify maximum penalties but typically, such breaches could incur significant fines and, in serious cases, criminal charges.
In summary, the Act sets out a clear process for the application and granting of TCOs, with specific obligations on both the applicant and the CEO. Breaches of the Act can lead to serious consequences, including financial penalties and potential criminal charges, although the exact penalties are not explicitly stated in the explanatory statement provided.