EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715409
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.
Laminex Pty Ltd applied for a TCO in respect of certain hydraulic power unit on 17 September 2007.
Instrument
TCO No 0715409 was made on 23 November 2007. It declares that those certain hydraulic power units 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. 0715409 is taken to have come into force on 17 September 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 Tariff Concession Instrument No. 0715409 was enacted under the Customs Act 1901 with the purpose of addressing the need for a more streamlined process to reduce customs duty on certain goods, specifically hydraulic power units in this instance. The Act, which was enacted by the Australian Parliament, facilitates the creation of Tariff Concession Orders (TCOs) to provide tariff relief for goods that are not produced in Australia and for which there are no suitable substitutes. The policy objective of this particular legislation was to encourage trade and reduce costs for businesses importing these specific hydraulic power units by granting them tariff concessions. This initiative aligns with broader economic policies aimed at fostering trade and reducing barriers for Australian businesses.
Scope and Application
The Tariff Concession Instrument No. 0715409 applies to the Customs Act 1901 and concerns the application of a Tariff Concession Order (TCO) for certain hydraulic power units. This legislation is specifically directed at persons or entities seeking to import these goods into Australia, allowing them to benefit from reduced customs duty rates provided no substitutable goods are produced in Australia. The scope of the Act encompasses the application process for tariff concessions, the determination criteria set out in sections 269C, 269D, and 269E, and the publication requirements outlined in section 269K(1). Jurisdictionally, this legislation falls under the Commonwealth, providing a national framework for tariff concessions as outlined in the Customs Act 1901. Certain goods are excluded from the concessions as specified in section 269SJ. The Act may extend its application through subordinate instruments, such as the Customs Tariff Act 1995, to specify the particular rates and duties applicable to the goods subject to the TCO.
Key Provisions
The main operative sections of this legislation (F2007L04499) focus on the creation and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not specified in section 269SJ, which lists those that cannot be subject to a TCO. If the application meets the core criteria outlined in section 269C, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For instance, in this case (TCO No. 0715409), certain hydraulic power units are subject to item 50 of Schedule 4, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes specific obligations and requirements on both the CEO and the applicant. The CEO must ensure that the application complies with the core criteria, which include verifying that no substitutable goods are produced in Australia on the day the application was lodged, as per sections 269C and 269P. Additionally, subsection 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions from any interested parties on why the TCO should not be made. For applicants, the key requirement is to submit a valid application that satisfies the core criteria and is not in respect of goods specified in section 269SJ.
In terms of consequences for breach, the Act does not explicitly outline specific offences or penalties for failing to comply with the provisions of the TCO. However, the Act does provide for general penalties under the Customs Act 1901 for non-compliance with customs regulations, which could potentially include fines and imprisonment. It is also important to note that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted before the date of registration.
Finally, while the Act does not specify maximum penalties for breaches of the TCO, it is important to consider that any non-compliance with the Customs Act 1901 could result in civil or criminal consequences, including fines and imprisonment. For example, knowingly making a false statement in an application for a TCO could lead to penalties under section 261 of the Customs Act 1901, which provides for a maximum penalty of two years imprisonment or a fine of up to $22,000, or both. It is essential for applicants and the CEO to ensure compliance with the Act to avoid such consequences.