EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716235
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.
Delta Emergency Response Townsville Pty Ltd applied for a TCO in respect of certain airport rescue and fire fighting vehicles on 25 September 2007.
Instrument
TCO No 0716235 was made on 14 December 2007. It declares that those certain airport rescue and fire fighting vehicles 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. 0716235 is taken to have come into force on 25 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. 0716235, enacted under the Customs Act 1901, was introduced to address the issue of providing tariff concessions on specific goods that are not produced domestically. This Act, enacted by the Australian Parliament, aims to facilitate the importation of goods that are essential but not manufactured in Australia by reducing or eliminating customs duty on these goods. In this instance, the instrument was made to benefit Delta Emergency Response Townsville Pty Ltd, which sought a tariff concession for certain airport rescue and fire fighting vehicles. The core criterion for the concession was met as no substitutable goods were produced in Australia at the time of the application. This legislative measure ensures that essential goods can be imported without the burden of customs duty, thereby benefiting importers and supporting the availability of critical services.
Scope and Application
The Tariff Concession Instrument No. 0716235 under the Customs Act 1901 applies to specific goods, in this case, certain airport rescue and fire-fighting vehicles, and concerns the application of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity seeking a concession on customs duty for specified goods, provided that such goods are not those listed in section 269SJ, which prohibits certain goods from being subject to a TCO. The application of the Act is nationwide, operating under the Commonwealth jurisdiction, and its application can be extended or restricted through subordinate instruments as defined by the Act. Exemptions and thresholds are outlined in the core criteria of section 269C, which must be met for a TCO application to be considered valid. This includes the absence of substitutable goods produced in Australia as defined by sections 269D and 269E. The geographic reach of this legislation is federal, applying uniformly across Australia, with no state or territory-specific variations noted in the text.
Key Provisions
The primary sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCO) include sections 269C, 269D, 269E, 269F, 269P, and 269S. Section 269F permits an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. The CEO must then assess whether the application meets the core criteria stipulated in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the application is approved, the CEO is mandated by section 269P(3) to issue a written order, the TCO, specifying the lower rate of customs duty applicable to the goods in question. This mechanism is designed to provide tariff relief for goods that are not domestically produced.
Entities and individuals governed by the Act are subject to several obligations when applying for and utilising a TCO. The CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are grounds for the TCO not to be granted, as per subsection 269K(1). The applicant must ensure that the goods specified in the TCO application meet the criteria of not having substitutable goods produced in Australia. Furthermore, the CEO must decide whether the application aligns with the stipulations of the Act, specifically considering the definitions of "goods produced in Australia" (section 269D), "ordinary course of business" (section 269E), and "substitutable goods" (section 269F) to make an informed decision.
Breach of the provisions of the Customs Act 1901 related to TCOs can lead to various civil and criminal consequences. The Act does not explicitly outline penalties for failing to comply with the TCO provisions; however, general contraventions of the Customs Act may incur penalties under the Crimes Act 1914. The severity of penalties varies depending on the nature and extent of the breach, but they can include fines and imprisonment. For instance, under section 282 of the Customs Act 1901, unauthorised importation or exportation of goods can lead to significant penalties. Additionally, the failure to adhere to the notification and submission requirements could be viewed as non-compliance, potentially resulting in administrative actions or financial liabilities.
The commencement of TCO No. 0716235 is deemed to have occurred on the date the application was lodged, as per subsection 269S(1). This TCO specifies that the certain airport rescue and fire fighting vehicles are subject to a duty rate of free, down from the general rate of 5%. Importantly, the TCO does not retroactively affect the rights of any person or impose any liabilities on them concerning actions taken before the TCO’s effective date. Importers, however, stand to benefit as they can apply for a refund of duty paid on goods imported since the TCO's effective date, under paragraph 126(1)(r) of the Regulations.