EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712042
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.
Concrete Pumping Equipment Australia Pty Ltd applied for a TCO in respect of certain concrete pumps on 25 July 2007.
Instrument
TCO No 0712042 was made on 12 October 2007. It declares that those certain concrete pumps 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. 0712042 is taken to have come into force on 25 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods and to ensure the accurate collection of customs duties and other charges. The Act established a framework under which Tariff Concession Orders (TCOs) can be made to provide relief on customs duties for certain goods. The enactment of Part XVA in the Customs Act 1901 was introduced to address the problem of providing tariff concessions to importers who could demonstrate that no substitutable goods were produced in Australia. The policy objective of this legislation is to facilitate trade by reducing the cost of imported goods, thereby supporting economic growth and competitiveness. TCO No. 0712042, made on 12 October 2007, is an example of such a concession applied to certain concrete pumps, reducing their duty from 5% to 0% and potentially benefiting importers by allowing them to claim refunds on duties paid prior to the TCO's effective date.
Scope and Application
The Customs Act 1901 applies to entities and individuals seeking tariff concession orders (TCO) for specific goods imported into Australia. This Act allows the Chief Executive Officer (CEO) of Customs to reduce the rate of customs duty for goods specified in a TCO. The CEO considers applications for TCOs, provided the goods are not listed in section 269SJ of the Act, which excludes certain items from tariff concessions. For an application to be successful, it must meet core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act extends to national territory, encompassing all states and territories within Australia. The Act does not impose any liabilities on persons other than the Commonwealth, and any pre-existing rights are preserved. The Act’s application can be further defined or extended through subordinate instruments, such as regulations or orders, which provide additional detail or specify particular conditions under which the Act operates.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, and 269F of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that must be met for a TCO to be granted, including the absence of substitutable goods produced in Australia in the ordinary course of business (sections 269B and 269E). Section 269D provides the definition of 'goods produced in Australia', and section 269E defines 'ordinary course of business'. If the CEO is satisfied that the application meets these criteria, they are required to issue a TCO, as stipulated in section 269P(3).
The Customs Act 1901 imposes certain obligations on parties applying for a TCO. An applicant must ensure that their application meets the core criteria outlined in section 269C, particularly demonstrating that no substitutable goods are produced in Australia in the ordinary course of business. The CEO, on their part, is required to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person to lodge a submission if they believe there are reasons why the TCO should not be made (subsection 269K(1)). Additionally, the TCO itself must be made in writing, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for breaches of the TCO process or its terms. However, failure to comply with the requirements of the Customs Act 1901 or the associated regulations could potentially lead to legal consequences, such as fines or other penalties under broader customs legislation. The explanatory statement does not provide specific details on maximum penalties for breaches related to TCOs but highlights that the TCO itself does not impose any liabilities on any person, including importers, who were acting under the previous duty rates before the TCO was issued.
The legislation ensures that the rights of individuals or entities are protected in that the TCO does not disadvantage anyone or impose liabilities for actions taken before the TCO was registered. This is particularly beneficial for importers, who can apply for a refund of duty on goods imported since the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations). This protection is designed to ensure that the transition to the new duty rates does not unfairly burden any party, thereby maintaining fairness and clarity in the application of customs duties.