EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800658
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 tunnel boring and lining installation plant on 11 January 2008.
Instrument
TCO No 0800658 was made on 4 April 2008. It declares that those certain tunnel boring and lining installation plant 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. 0800658 is taken to have come into force on 11 January 2008.
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. 0800658, enacted in 2008 under the Customs Act 1901, addresses the need for tariff concessions on specific goods, in this instance, certain tunnel boring and lining installation plant. This instrument was introduced by the Chief Executive Officer of Customs following an application by John Holland Pty Ltd. The policy objective, as outlined in the Act, is to provide a reduced rate of customs duty for goods that are not substitutable by any goods produced in Australia. This is particularly relevant when no equivalent goods are manufactured domestically, thus promoting the importation of specialised equipment necessary for infrastructure projects. The instrument was made effective from 11 January 2008, the date the application was lodged, and no submissions were received in opposition to its implementation.
Scope and Application
The Tariff Concession Instrument No. 0800658, made under the Customs Act 1901, applies to the specific tunnel boring and lining installation plant that John Holland Pty Ltd applied for a tariff concession on. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which reduce the duty on certain goods. This particular TCO applies to the specified plant and the concession reduces the duty from the general rate of 5% to free, provided that no substitutable goods were produced in Australia on the date the application was lodged. The instrument operates under the authority of the Customs Act 1901, which extends its reach to the entire Commonwealth of Australia. There are exclusions under section 269SJ of the Act for certain goods that cannot be subject to a TCO, but these do not apply to the plant in question. The TCO was made on 4 April 2008, but is considered to have come into force on the date the application was lodged, 11 January 2008. The TCO does not affect the rights of any person as at the date of registration and does not impose any new liabilities on any person.
Key Provisions
The Tariff Concession Instrument No. 0800658, issued under the Customs Act 1901, provides a lower rate of customs duty for certain tunnel boring and lining installation plant, which are specified as being subject to item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The concession effectively renders the duty on these goods free, whereas the general rate would be 5% (section 269P(3)). The instrument was made on 4 April 2008, and it is deemed to have come into force on 11 January 2008, the date on which the application for the tariff concession was lodged (subsection 269S(1)). This concession applies to goods imported on or after the commencement date.
Entities and individuals governed by the Customs Act 1901 must ensure compliance with the conditions set out in the TCO. Specifically, the Chief Executive Officer of Customs must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Additionally, any person who considers that there are reasons why the TCO should not be made must lodge a submission with the CEO within the timeframe specified in the Gazette notice (subsection 269K(1)). In this case, no submissions were received by the CEO, indicating that the concession was granted without objection.
Breaching the conditions set out in the Tariff Concession Instrument or the Customs Act 1901 may result in legal consequences. While the explanatory statement does not detail specific offences or penalties, general provisions under the Customs Act 1901 apply. Typically, unauthorised importation or exportation of goods, or failure to comply with customs regulations, may lead to civil or criminal penalties, including fines and imprisonment, depending on the severity of the breach. The exact penalties would be determined in accordance with the specific provisions of the Customs Act 1901 and any relevant regulations.