EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720954
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.
Challenge Implements Holdings Pty Limited applied for a TCO in respect of certain bucket loader frame assembly parts on 07 December 2007.
Instrument
TCO No 0720954 was made on 07 March 2008. It declares that those certain bucket loader frame assembly 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. 0720954 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 Tariff Concession Instrument No. 0720954, enacted in 2008, provides a framework for the Customs Act 1901 to offer tariff concessions on certain imported goods. This instrument was designed to address the gap in tariff rates for specific goods, particularly those not produced domestically, ensuring they receive a reduced customs duty rate. The instrument was enacted by the Chief Executive Officer of Customs in accordance with the legislative provisions set out in the Customs Act 1901. The policy objective is to provide tariff relief on imported goods that do not have substitutable Australian-produced counterparts, thereby facilitating trade and potentially lowering costs for importers. This approach supports the broader economic aim of promoting competitive imports and enhancing the efficiency of the Australian market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the application and scope of Tariff Concession Orders (TCOs), which are made by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals and entities seeking a reduction in customs duty for specified goods. The Act allows an application for a TCO to be made by any person provided that the goods in question are not those specified in section 269SJ, which outlines goods that cannot be subject to a TCO. For an application to be successful, it must meet the core criteria, primarily that no substitutable goods are produced in Australia at the time the application is lodged. The geographic reach of this legislation is national, as it pertains to goods entering Australia and involves federal regulation. The application of this Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the applicable duty rates and items. The TCO in question, TCO No 0720954, pertains to certain bucket loader frame assembly parts and was effective from the date the application was lodged, 7 December 2007. This particular TCO was made on 7 March 2008 and resulted in the goods being subject to a free rate of duty, rather than the general rate of 5%.
Key Provisions
The main provisions of this legislation, specifically Tariff Concession Order No. 0720954, focus on the application and issuance of Tariff Concession Orders (TCO) under section 269F of the Customs Act 1901 (the Act). This order was issued by the Chief Executive Officer of Customs (CEO) in response to an application by Challenge Implements Holdings Pty Limited for a TCO regarding certain bucket loader frame assembly parts. The CEO issued the TCO under section 269P(3) of the Act, confirming that the application met the core criteria, particularly that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). The TCO specifies that these parts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty rate from 5% to free.
The obligations imposed by this Act on the parties involved primarily revolve around the application process and the conditions under which a TCO can be granted. The CEO must ensure that the application meets the core criteria as outlined in the Act. This includes verifying that no substitutable goods were produced in Australia on the application date, as defined by sections 269D and 269E. The applicant, in this case, Challenge Implements Holdings Pty Limited, must provide sufficient evidence to support their application. Once a TCO is granted, the CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). This transparency ensures that the decision-making process is open and accountable.
In terms of consequences for breach, the Act does not explicitly state offences or penalties for non-compliance with the TCO or the application process. However, any failure to adhere to the conditions set out in the TCO or misrepresentation in the application could potentially lead to legal scrutiny or the revocation of the TCO. The Act ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the issuance of the TCO, as per subsection 269S(1). This means that while the TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations), it does not impose any new liabilities on any person.