EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800935
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 grout and lifting systems on 16 January 2008.
Instrument
TCO No 0800935 was made on 11 April 2008. It declares that those certain grout and lifting systems 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. 0800935 is taken to have come into force on 16 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide for a reduced rate of customs duty on specified goods, contingent on certain criteria being met, such as the absence of substitutable goods produced in Australia. The 2008 Tariff Concession Instrument No. 0800935, made under this Act, addresses the specific case of John Holland Pty Ltd's application for a TCO concerning certain grout and lifting systems, which was accepted due to the absence of substitutable goods in Australia. The application process involved publishing a notice in the Gazette to allow for any objections, though none were received. This instrument aims to facilitate the importation of these goods at a lower duty rate, effective from the date of application, without retroactively affecting existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply a lower rate of customs duty on certain goods. The Act applies to any person or entity seeking to import goods that meet the criteria for tariff concession. Such concessions are applicable to goods specified in the application, provided that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application. This instrument extends across the Commonwealth of Australia and applies to all entities and individuals engaging in the importation of goods subject to the TCO. The application of TCOs does not extend to goods specified in section 269SJ of the Act, which are explicitly excluded from tariff concessions. Once a TCO is made, it is taken to have come into force on the day the application was lodged, as per subsection 269S(1) of the Act. Importantly, the TCO does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth in respect of actions taken prior to the registration of the order.
Key Provisions
Section 269F of the Customs Act 1901 permits a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods, provided the 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 set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must issue a TCO.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that the goods they seek a TCO for are not prohibited by section 269SJ and that they meet the criteria specified in section 269C. The CEO is obligated to evaluate the application against these criteria and, if satisfied, to issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions on the application, as required by subsection 269K(1).
Under the Customs Act 1901, breaches of the conditions for a TCO can result in civil or criminal penalties. The specific consequences for breach are not detailed in the explanatory statement, but it is known that breaches of customs legislation can lead to fines and imprisonment. The maximum penalties would depend on the specific breach and the courts' discretion in imposing penalties. Importers may also be entitled to apply for a refund of duty on goods imported since the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations, without incurring additional liabilities.