EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720740
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.
Work Smart Equipment Pty Ltd applied for a TCO in respect of certain dumpers on 7 December 2007.
Instrument
TCO No 0720740 was made on 29 February 2008. It declares that those certain dumpers 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. 0720740 is taken to have come into force on 7 December 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. 0720740 was enacted under the Customs Act 1901, aiming to provide tariff concessions on certain goods by reducing the applicable customs duty. This legislative instrument was introduced to address the gap in the tariff regime that may have hindered the importation of specific goods that could not be substituted by Australian-produced alternatives. This instrument was made by the Chief Executive Officer of Customs, in accordance with section 269F of the Customs Act 1901. The policy objective behind this concession is to facilitate the importation of goods that are not produced domestically, thereby encouraging trade and potentially lowering the cost of these goods for consumers. This instrument came into force on the date the application was lodged, 7 December 2007, and it ensures that the rights of importers are positively impacted while not imposing any new liabilities on them.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty to specific goods. This Act applies to entities and individuals involved in the importation of goods, particularly those who apply for or benefit from tariff concessions. Geographically, its reach is national, encompassing all Australian territory under Commonwealth jurisdiction. The Act excludes certain goods, as specified in section 269SJ, from the concession scheme, and its application is further refined by subsidiary instruments such as the Customs Tariff Act 1995. For instance, TCO No. 0720740 pertains to certain dumpers and specifies that they are subject to a free duty rate as of 7 December 2007, the date the application was lodged. This order does not affect the rights of any person, except the Commonwealth, with regard to actions taken prior to its registration, ensuring that importers can apply for duty refunds from the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to the Tariff Concession Instrument No. 0720740 are sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, provided those goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, outlined in section 269C, they must make a written order declaring that the goods in question are subject to a specified lower rate of customs duty as set out in Schedule 4 of the Customs Tariff Act 1995. This order, or TCO, effectively reduces the duty rate applicable to those goods.
The Act imposes several obligations and requirements on the parties it governs. Firstly, any applicant seeking a TCO must ensure their application is lodged with the CEO and is not in respect of goods specified in section 269SJ. The CEO, upon receiving a valid application, is required to determine whether the application meets the core criteria as set out in section 269C. If satisfied, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties within a reasonable timeframe as per subsection 269K(1). If no objections are received, the CEO must proceed to make the TCO. Additionally, under section 269S(1), the TCO is considered to come into force on the day the application was lodged, ensuring that the rights of persons other than the Commonwealth are not adversely affected by the concession.
The Act provides for specific consequences for breaches or non-compliance. While the explanatory statement does not detail specific offences or penalties within the context of the TCO process, it is understood that general provisions of the Customs Act 1901 and associated regulations would apply to any breaches. These could include administrative penalties, fines, or other enforcement actions as prescribed by relevant laws. The Act ensures that the rights of importers are beneficially affected and that no liabilities are imposed on persons other than the Commonwealth in respect of actions taken before the TCO's effective date. Importers may also apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.
In summary, the Tariff Concession Instrument No. 0720740, under the Customs Act 1901, facilitates the reduction of customs duty on specified goods through the application and approval process for TCOs by the CEO. This process includes the obligation to consider and respond to submissions from interested parties and ensures that the rights of importers are protected while imposing no new liabilities on non-Commonwealth entities. While specific penalties for non-compliance are not detailed in the explanatory statement, general enforcement mechanisms under the Customs Act 1901 would apply.