EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720893
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 Limited applied for a TCO in respect of certain front mounted bucket dumpers on 07 December 2007.
Instrument
TCO No 0720893 was made on 29 February 2008. It declares that those certain front mounted bucket 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. 0720893 is taken to have come into force on 07 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 Customs Act 1901, enacted by the Australian Parliament, provides the framework for the regulation of customs and excise duties. The Act facilitates the administration of tariffs and other trade-related measures to protect domestic industries and manage the flow of goods into and out of the country. The Act includes a scheme under which Tariff Concession Orders (TCOs) can be made to lower the rate of customs duty on specific goods. This mechanism was introduced to address the need for flexibility in tariff rates to support industry development and to ensure competitive pricing in the market. The process involves an application to the Chief Executive Officer of Customs, who must determine if the application meets the core criteria, such as the absence of substitutable goods produced in Australia. The objective is to ensure that tariff concessions are granted in a manner that supports economic efficiency and fair trade practices.
Scope and Application
The Tariff Concession Instrument No. 0720893 under the Customs Act 1901 applies specifically to certain front mounted bucket dumpers for which Work Smart Equipment Pty Limited applied for a tariff concession order (TCO). This Act pertains to the granting of TCOs by the Chief Executive Officer of Customs (CEO) to reduce the rate of customs duty on certain goods, provided they meet specific criteria set out in the Act. The application of this legislation is focused on goods that are not produced in Australia and for which no substitutable goods are manufactured domestically. The geographic reach of the Act is national, as it is a Commonwealth statute, and the TCO applies across Australia. The Act does not impose any liabilities on individuals or entities, nor does it disadvantage persons other than the Commonwealth by affecting rights as at the date of registration. The TCO, which came into force on the date the application was lodged, allows for a refund of duty on the specified goods imported since that date, benefiting importers. The CEO is mandated to publish a notice in the Gazette inviting submissions on the TCO application, though no submissions were received in this instance. The scope of the TCO can be extended or refined through subordinate instruments, which may provide additional details or exceptions to the general rules established in the primary Act.
Key Provisions
The Customs Act 1901, under Part XVA, provides a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs), as detailed in section 269F. These orders apply a lower rate of customs duty to specified goods. Section 269C of the Act mandates that a TCO application is considered valid if no substitutable goods were produced in Australia on the date the application was submitted, as defined by section 269D for 'goods produced in Australia' and section 269E for 'ordinary course of business'. An application that meets these core criteria leads the CEO to issue a TCO, as stipulated in section 269P(3), which declares the goods subject to the specified tariff item from Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Customs Act 1901 on entities applying for a TCO include ensuring that the goods in question do not have substitutable counterparts produced in Australia. The Act also requires the CEO to publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO, as per section 269K(1). This ensures transparency and provides an opportunity for public input. The CEO must consider any submissions received but, in this case, no submissions were lodged against the application from Work Smart Equipment Pty Limited for their front mounted bucket dumpers, leading to the issuance of TCO No. 0720893 on 29 February 2008.
Breaches of the requirements under the Customs Act 1901, particularly concerning the submission of false information or misrepresentation in a TCO application, can lead to significant penalties. Section 283 of the Act details the criminal penalties for knowingly making a false statement or representation in a customs document, which can include imprisonment for up to five years or a fine of up to 10,000 penalty units, or both. Additionally, section 283D imposes penalties for misleading or deceptive conduct in relation to goods entering or leaving Australia, which can also attract substantial fines. Civil penalties may also apply, as outlined in the Act, and can be pursued by the Australian Taxation Office or other relevant authorities.