EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802330
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.
Patrick Stevedoring Pty Ltd applied for a TCO in respect of certain mobile slewing harbour cranes on 08 February 2008.
Instrument
TCO No 0802330 was made on 18 April 2008. It declares that those certain mobile slewing harbour cranes 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. 0802330 is taken to have come into force on 08 February 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, was introduced to provide a structured framework for customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0802330 was created to address a specific gap in the application of customs duties to certain imported goods. This instrument was introduced following an application by Patrick Stevedoring Pty Ltd for a TCO concerning certain mobile slewing harbour cranes. The problem it aimed to solve was the potential imposition of a 5% customs duty on these cranes, which could be mitigated by applying a TCO. The policy objective was to ensure that the CEO of Customs could grant tariff concessions where appropriate, facilitating trade and reducing costs for importers of specified goods.
Scope and Application
The Tariff Concession Instrument No. 0802330 under the Customs Act 1901 applies to the specific goods identified in the application by Patrick Stevedoring Pty Ltd, namely certain mobile slewing harbour cranes. The instrument is issued by the Chief Executive Officer of Customs, who determines whether the application meets the criteria for a Tariff Concession Order (TCO). This process involves assessing whether the goods in question are not substitutable by goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E and 269F of the Act. The instrument declares that these cranes are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a rate of duty of free, down from the general rate of 5%. The scope of this legislation is geographically limited to Australia, specifically under the Commonwealth's authority, and it does not apply to goods listed in section 269SJ of the Act which cannot be subject to a TCO. The application of this Tariff Concession Order is effective from 8 February 2008, the date on which the application was lodged, without any retroactive effect on pre-existing transactions or liabilities.
Key Provisions
The key operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269F, 269P, 269K and 269S of the Customs Act 1901. These sections establish the framework for the creation of Tariff Concession Orders (TCOs) and detail the conditions that must be met for such orders to be granted. Section 269F allows for applications for TCOs to be submitted to the Chief Executive Officer of Customs (CEO), who must then determine whether the application meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets these criteria, they are required to make a written TCO, as outlined in section 269P. Section 269K mandates that the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the proposed TCO. Finally, section 269S states that the TCO is considered to have come into effect on the date the application was lodged.
The obligations imposed by this legislation primarily concern the CEO, who must carefully evaluate each TCO application to ensure it meets the statutory criteria. The CEO must also publish a notice in the Gazette inviting objections to the proposed TCO and must consider any submissions received in response to this notice. Importers of goods subject to a TCO may have the obligation to apply for a refund of duty on goods imported since the TCO is considered to have come into effect, as per paragraph 126(1)(r) of the Regulations.
The legislation does not explicitly outline offences or penalties for breaches of the TCO provisions. However, any failure to comply with the conditions of a TCO could potentially result in the imposition of the standard rate of customs duty on the goods in question, or other civil or administrative penalties as may be applicable under the Customs Act 1901 or other relevant legislation. The maximum penalties for breaches of the Customs Act 1901 can be severe, including substantial fines and imprisonment, depending on the nature and severity of the offence. It is important to note that the specifics of any penalties or consequences for breaches of the TCO provisions would need to be determined on a case-by-case basis, taking into account the relevant legislation and the circumstances of the breach.