EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720741
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 0720741 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. 0720741 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. 0720741, enacted in 2008, is an instrument made under the Customs Act 1901, which provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on certain goods. This instrument was introduced to address the specific need for a lower customs duty rate for certain goods, in this case, certain dumpers, as applied for by Work Smart Equipment Pty Ltd. The instrument was enacted by the CEO following a valid application and after ensuring that no substitutable goods were produced in Australia. The objective was to facilitate smoother importation of these goods by reducing the duty rate from the general 5% to free, thereby benefiting importers who could apply for duty refunds on goods imported since the effective date of the concession.
The instrument was brought into force on the date the application was lodged, 7 December 2007, and does not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth. The instrument aims to ensure that the rights of importers are positively affected, allowing them to benefit from the tariff concession without any retrospective disadvantage or additional obligations.
Scope and Application
The Tariff Concession Instrument No. 0720741 under the Customs Act 1901 applies to the specific case of Work Smart Equipment Pty Ltd's application for tariff concessions on certain dumpers, which are subject to the conditions outlined in the Act. The legislation mandates that the Chief Executive Officer of Customs (CEO) must assess whether an application for a Tariff Concession Order (TCO) meets the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business. Upon meeting these criteria, the CEO is required to make a written order that applies a reduced rate of customs duty on the specified goods, in this case, granting a free rate of duty on the dumpers. This Act extends its reach to any person or entity applying for tariff concessions, with its application being governed by the national jurisdiction of the Commonwealth. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on anyone, providing beneficial rights to importers who can apply for a refund of duty on goods imported since the TCO was taken to have come into force. The application of this Act may be extended or restricted through subordinate instruments, allowing for further regulation and adaptation of the tariff concession scheme.
Key Provisions
The Customs Act 1901 (the Act), under Part XVA, outlines a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO). Section 269F of the Act permits an individual to apply to the CEO for a TCO for specific goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, which specifies goods ineligible for a TCO, the CEO must evaluate whether the application fulfils the core criteria outlined in section 269C. This core criterion is satisfied if, on the day the application was made, no substitutable goods were produced in Australia in the ordinary course of business, as defined by section 269D, 269E, and 269F of the Act.
In this context, "goods produced in Australia" refers to those manufactured within Australia, "ordinary course of business" implies regular commercial activities, and "substitutable goods" are those produced in Australia that can serve the same purpose as the goods in question. If the CEO concludes that the application meets the core criteria, they must issue a written order, a TCO, indicating that the goods specified in the application are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (the Tariff), as stated in subsection 269P(3) of the Act.
The obligations imposed by the Act on the CEO involve assessing the validity of TCO applications and ensuring they do not concern goods specified in section 269SJ. The CEO must also consult with the public by publishing a notice in the Gazette, inviting submissions from anyone who believes the TCO should not proceed, as per subsection 269K(1). In this case, the CEO did not receive any submissions. Furthermore, a TCO is deemed to have come into effect on the date the application was lodged, according to subsection 269S(1).
The legal consequences for non-compliance with the Act are not explicitly detailed in the provided text. However, the Act ensures that the rights of persons other than the Commonwealth are protected, meaning that no individual would be disadvantaged or incur liabilities for actions taken before the TCO registration date. Importers of the goods subject to the TCO can apply for a refund of duty under paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person.