EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711852
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.
Baden Cranes Pty Limited applied for a TCO in respect of certain vibratory pile-driver hammers on 23 July 2007.
Instrument
TCO No 0711852 was made on 02 October 2007. It declares that those certain vibratory pile-driver hammers 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. 0711852 is taken to have come into force on 23 July 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 Commonwealth Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders allow for a reduced rate of customs duty on specified goods, provided they meet certain criteria. The primary objective of this Act, as highlighted in the explanatory statement, is to facilitate trade by reducing customs duties on goods for which there are no substitutable Australian-made alternatives, thus encouraging the importation of necessary goods where local production is insufficient or non-existent. The CEO is tasked with assessing applications against these criteria and, upon satisfaction, issuing a written order that reduces the duty on the specified goods. In the case of TCO No. 0711852, made on 2 October 2007, certain vibratory pile-driver hammers were granted a tariff concession, resulting in a duty-free status for these items. The process ensures that no person, except the Commonwealth, is disadvantaged or imposed with liabilities retroactively from the date the TCO application was lodged.
Scope and Application
The Customs Act 1901, specifically through Part XVA, outlines a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to goods for which an applicant seeks tariff concessions, aiming to reduce or waive customs duty on specified goods, provided they meet certain criteria. The Act applies to any individual or entity seeking tariff concessions for goods not produced in Australia and not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The scope of the Act extends to national territory and is applicable throughout Australia. It does not impose any liabilities on persons other than the Commonwealth and does not affect any rights held by persons as at the date of registration of the TCO. The CEO has the authority to extend or restrict the application of TCOs through subordinate instruments, ensuring the scheme remains flexible and responsive to economic and industrial needs.
Key Provisions
The Customs Act 1901, particularly Part XVA, outlines the process for Tariff Concession Orders (TCOs) which are designed to lower the customs duty on specific goods. Under section 269F, a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO if the goods in question do not fall under the exclusions listed in section 269SJ. Section 269C stipulates that for an application to meet the core criteria, no substitutable goods must be produced in Australia on the day the application was made. The definitions for 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are provided in sections 269D, 269E, and 269B respectively. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO, as per section 269P(3), declaring the goods to which the concession applies.
The obligations under the Act for the CEO include assessing the validity of TCO applications against the criteria set out in sections 269C, 269B, and 269SJ. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties if they deem an application valid, under subsection 269K(1). In the case of TCO No. 0711852, the CEO was satisfied that the application from Baden Cranes Pty Limited met the core criteria, and no submissions were received against the concession. As per subsection 269S(1), the TCO is considered effective from the date the application was lodged, which in this instance was 23 July 2007.
Failure to comply with the requirements of the Customs Act 1901 or the Tariff Concession Orders can result in civil or criminal penalties. While the specific penalties for breaches of the Customs Act or the Tariff Concession Orders are not detailed in the explanatory statement, it is known that breaches of the Customs Act can result in fines and imprisonment. The maximum penalties depend on the nature and severity of the breach, and are generally outlined in the respective sections of the Act or in the Customs Act itself. The explanatory statement does not specify the penalties for this particular TCO but advises that the TCO does not affect the rights of any person, except the Commonwealth, and does not impose any liabilities on any person in respect of actions taken before the TCO was registered.