EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713410
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.
Pioneer Road Services Pty Ltd applied for a TCO in respect of a certain asphalt plant on 22 August 2007.
Instrument
TCO No 0713410 was made on 02 November 2007. It declares that those certain asphalt plants 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. 0713410 is taken to have come into force on 22 August 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 for the imposition of customs duties on imported goods. To address the issue of potentially high customs duties on certain goods that are not produced domestically, the Act includes provisions for Tariff Concession Orders (TCOs). These orders, made by the Chief Executive Officer of Customs, can reduce or eliminate customs duty on specific goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective behind these concessions is to facilitate trade and support domestic industries by making imported goods more competitively priced. The instrument F2007L04353, Tariff Concession Instrument No. 0713410, exemplifies this mechanism by granting a tariff concession on certain asphalt plants, reducing their duty rate from 5% to free, thereby benefiting importers and potentially stimulating demand for these goods. This legislative instrument was introduced to ensure that specific imported goods, in this case asphalt plants, could enter the Australian market under more favourable conditions, aligning with the broader policy of encouraging trade and economic growth.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the application of tariff concessions through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs (CEO). These orders apply to goods for which an application has been made under section 269F of the Act, provided the goods do not fall under the prohibitions outlined in section 269SJ. The TCO process hinges on the core criteria stipulated in sections 269C and 269D, requiring that no substitutable goods are produced in Australia at the time of application. The instrument in question, TCO No. 0713410, was made on 2 November 2007, following an application by Pioneer Road Services Pty Ltd for an asphalt plant. This TCO applies to specific asphalt plants, aligning them with item 50 of Schedule 4 of the Customs Tariff Act 1995, thereby setting their duty rate at zero, down from the general rate of 5%. The CEO published a notice in the Gazette inviting submissions opposing the TCO, which did not receive any, and the TCO came into force on the date of application, 22 August 2007. Notably, the TCO does not retroactively disadvantage or impose liabilities on any party other than the Commonwealth, with importers potentially benefiting from duty refunds as per Regulation 126(1)(r).
Key Provisions
The main sections of the Customs Act 1901, as applied through Tariff Concession Instrument No. 0713410, establish a framework for Tariff Concession Orders (TCOs) which are designed to reduce the rate of customs duty on certain goods. Section 269F of the Act allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO for specified goods, provided that these goods do not fall under the restricted list outlined in section 269SJ. If the CEO determines that the application meets the core criteria, they must issue a written order as per section 269P(3). This particular TCO, numbered 0713410, applies to certain asphalt plants, granting them a tariff concession which reduces the duty rate from 5% to free, as stated in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on both the applicants and the CEO. For applicants, the primary requirement is to ensure that their application for a TCO is valid and that the goods in question meet the criteria for a concession, specifically that no substitutable goods are being produced in Australia at the time of application, as outlined in sections 269C and 269D. The CEO is required to review the application and, if satisfied that the core criteria are met, to make a written order declaring the concession. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections or reasons why the TCO should not proceed. In this instance, no submissions were received.
In terms of potential breaches and consequences, the Customs Act 1901 provides for both civil and criminal penalties. Section 269A of the Act outlines the potential civil penalties, which may include fines or other monetary penalties for non-compliance with the Act or the conditions of a TCO. However, specific maximum penalties are not detailed in the provided text, and further consultation of the Act or relevant authorities would be necessary to ascertain the exact penalties. For criminal penalties, section 269ZC of the Act provides for imprisonment or fines for serious breaches, such as fraudulent applications or misuse of TCOs. The exact penalties would depend on the severity and nature of the breach.