EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716889
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.
Cutting Edges Replacement Parts Pty Ltd applied for a TCO in respect of certain bucket loader parts on 5 October 2007.
Instrument
TCO No 0716889 was made on 14 December 2007. It declares that those certain bucket loader parts 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. 0716889 is taken to have come into force on 5 October 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. 0716889 was enacted in 2007 as part of the Customs Act 1901, to address the need for tariff concessions that can lower the customs duty on certain goods. This instrument was introduced to support businesses by reducing the financial burden of customs duties, thereby encouraging trade and investment. The Customs Act 1901, managed by the Parliament of Australia, provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders based on specific criteria, such as the absence of substitutable goods produced in Australia. The policy objective behind this legislation is to facilitate smoother trade operations and to provide economic relief by lowering the duty rates on eligible goods, thereby promoting a competitive business environment. This particular instrument concerns certain bucket loader parts, granting them a free rate of duty under the Customs Tariff Act 1995, effective from the date of the application.
Scope and Application
The Tariff Concession Instrument No. 0716889 under the Customs Act 1901 applies specifically to certain bucket loader parts for which Cutting Edges Replacement Parts Pty Ltd made an application on 5 October 2007. The instrument was enacted to provide a tariff concession for these goods, reducing the customs duty rate from the general 5% to free, provided the application met the core criteria outlined in the Act. The Chief Executive Officer of Customs was satisfied that the application met these criteria as no substitutable goods were produced in Australia. The instrument, which came into force on the day the application was lodged, does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person, ensuring that the rights of importers are beneficially affected by allowing them to apply for a refund of duty on goods imported since the date the TCO was taken to have come into force.
Key Provisions
The Customs Act 1901, under Part XVA, establishes the framework for Tariff Concession Orders (TCOs) that may be made by the Chief Executive Officer of Customs (CEO) (s 269F). An application for a TCO can be made by a person who seeks a lower rate of customs duty on goods not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO (s 269F, s 269SJ). To qualify for a TCO, the CEO must be satisfied that the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P(3) respectively.
The obligations imposed on the CEO include the duty to decide whether an application meets the core criteria for a TCO, and to make a written order if satisfied (s 269P(3)). Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe the TCO should not be made (s 269K(1)). A TCO is deemed to come into force on the day the application is lodged (s 269S(1)). In the case of TCO No. 0716889, the application was lodged by Cutting Edges Replacement Parts Pty Ltd for certain bucket loader parts on 5 October 2007. The CEO was satisfied that no substitutable goods were produced in Australia, and hence, made the order effective from the same date.
In terms of penalties and consequences, the Act does not explicitly state penalties for breaches related to TCOs. However, the general legal framework surrounding the Customs Act implies that non-compliance with provisions, such as providing false information in an application, could lead to civil or criminal penalties. These could include fines or imprisonment, depending on the severity of the breach. Additionally, any person who imposes liabilities on others contrary to the provisions protecting pre-existing rights would face legal consequences.
The TCO itself does not disadvantage any person other than the Commonwealth or impose new liabilities on any person (s 126(1)(r) of the Regulations). Instead, it benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force. This ensures that the rights of importers are protected and beneficially affected by the tariff concession.