EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719752
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.
John Holland Pty Ltd applied for a TCO in respect of certain pressure transfer pumps parts on 20 November 2007.
Instrument
TCO No 0719752 was made on 8 February 2008. It declares that those certain pressure transfer pumps 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. 0719752 is taken to have come into force on 20 November 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 peron 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 Australian Parliament, includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislation was introduced to address the need for a mechanism whereby certain goods could receive tariff concessions, thereby reducing the customs duty payable on them, provided certain criteria were met. The Tariff Concession Instrument No. 0719752, made under this Act, concerns the application of these provisions to specific pressure transfer pump parts. The policy objective, as outlined in the Act, is to ensure that TCOs are granted when it is determined that no substitutable goods are produced in Australia, thus supporting the import of such goods at a reduced tariff rate. The explanatory statement confirms that the Tariff Concession Order was made on 8 February 2008, following an application by John Holland Pty Ltd, and that it came into effect on 20 November 2007. This legislative instrument aims to facilitate the import of the specified parts without imposing any new liabilities on importers or affecting existing rights adversely.
Scope and Application
The Tariff Concession Instrument No. 0719752 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) is granted, facilitating a lower rate of customs duty. This legislation specifically targets goods that are not produced in Australia and for which there are no substitutable goods produced domestically. The application of this instrument extends to any person who applies for a TCO in respect of goods, provided the application does not relate to goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The instrument was made in response to an application by John Holland Pty Ltd for certain pressure transfer pump parts, declaring these goods to have a free rate of duty as opposed to the general rate of 5%. The geographic and jurisdictional reach of this legislation is national, applying across Australia as it falls under the Commonwealth's authority. There are no stated exclusions or exemptions in the instrument itself, though it is noted that the TCO does not affect the rights of any person to disadvantage them or impose liabilities for actions taken before the TCO was registered. The application of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed items of duty.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), include section 269F (2) which allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO, section 269C (2) which outlines the core criteria that must be met for the TCO application to be considered, and section 269P(3) which mandates the CEO to issue a written TCO if the application meets these criteria. According to section 269C, a TCO application is valid if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Section 269P(3) then requires the CEO to make a TCO if this criterion is met.
The obligations and requirements imposed by the Act on the parties involved are significant. For the applicant, the key requirement is to ensure that their application for a TCO is lodged in accordance with section 269F, and that it adheres to the core criteria specified in section 269C. For the CEO, the obligations include reviewing the application, determining whether it meets the core criteria, and if so, issuing a written TCO under section 269P(3). Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, which was done in this case with no submissions received.
Regarding the consequences of breach, section 269SJ of the Customs Act 1901 specifies goods that cannot be subject to a TCO, thereby establishing a boundary for what can be considered in applications. If an application is made for goods that fall under this category, it would be invalidated, and there could be potential administrative penalties for misapplying for a TCO. However, the explanatory statement does not specify detailed penalties for breaches of these sections; penalties would typically be aligned with other sections of the Customs Act 1901, which may include fines and potential imprisonment for more severe breaches. The TCO itself, however, does not impose any new liabilities on persons other than the Commonwealth and does not affect existing rights adversely.