EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802859
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.
Hitachi Construction Machinery (Australia) Pty Ltd applied for a TCO in respect of certain mineral sand processing plant parts on 21 February 2008.
Instrument
TCO No 0802859 was made on 28 April 2008. It declares that those certain mineral sand processing plant 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. 0802859 is taken to have come into force on 21 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 was enacted by the Parliament of Australia to regulate customs and border control, including the imposition of duties on imported goods. The Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO), providing lower rates of customs duty on goods specified in the order. Enacted to streamline the process of applying for tariff concessions and to support Australian industries by potentially lowering the cost of imported goods, TCO No. 0802859 was made under this legislative framework on 28 April 2008 in response to an application from Hitachi Construction Machinery (Australia) Pty Ltd for tariff concessions on certain mineral sand processing plant parts. This instrument was introduced to ensure that the application met the core criteria, notably the absence of substitutable goods produced in Australia, thereby allowing for the concession to be granted.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) mechanism, facilitates reduced customs duties for specific goods, provided no substitutable goods are produced in Australia at the time of application. The application process requires an assessment by the Chief Executive Officer of Customs (CEO) to ensure the goods are not among those prohibited by section 269SJ of the Act. If the application meets the core criteria outlined in section 269C, the CEO issues a TCO, resulting in a lower duty rate for the specified goods. For instance, the TCO No. 0802859 granted to Hitachi Construction Machinery (Australia) Pty Ltd on 28 April 2008, exempted certain mineral sand processing plant parts from the usual 5% duty, setting it to free. This legislative instrument applies nationally, affecting importers who can benefit from duty refunds for goods imported since the TCO's effective date, 21 February 2008. The application of the TCO does not disadvantage or impose new liabilities on any person other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0802859, as referenced in the Customs Act 1901 (section 269F), enable the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs) for certain goods. If an application for a TCO is made and the CEO is satisfied that it meets the core criteria, they must issue a written order that specifies the goods eligible for the concession (section 269P(3)). Section 269C of the Act stipulates that for an application to meet the core criteria, no substitutable goods must have been produced in Australia on the day the application was lodged. Section 269B provides definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'.
The Act imposes certain obligations on the parties involved. For instance, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. If no submissions are received, the CEO proceeds to make the order. Hitachi Construction Machinery (Australia) Pty Ltd, for example, applied for a TCO on 21 February 2008, and the CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria.
Failure to comply with the provisions of the Act can result in various consequences. While the explanatory statement does not explicitly detail specific offences, penalties, or consequences for breach, it is inferred that non-compliance with the conditions set forth for TCO applications could lead to legal repercussions. The general rate of duty on the goods subject to the TCO is 5%, but under the concession, it is set to free. This concession does not affect the rights of any person as at the date of registration or impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. Importers of such goods will have the right to apply for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.