EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804267
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.
Freightquip Australia Pty Ltd applied for a TCO in respect of certain locotractors on 10 April 2008.
Instrument
TCO No 0804267 was made on 04 July 2008. It declares that those certain locotractors 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. 0804267 is taken to have come into force on 10 April 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, established a framework within which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs. This legislation aimed to address the need for concessional tariffs for certain imported goods, ensuring that Australian businesses and consumers could access goods at reduced rates when no suitable domestic alternatives were available. The Tariff Concession Instrument No. 0804267 was created to provide relief by exempting specific locotractors from the general customs duty, effective from the date the application was lodged. This approach ensures that the rights of importers are positively impacted, allowing them to seek refunds for duties paid on these goods since the effective date of the concession, without imposing any new liabilities on them or others.
Scope and Application
The Tariff Concession Instrument No. 0804267 under the Customs Act 1901 applies to goods that are subject to a Tariff Concession Order (TCO), which was made in respect of certain locotractors by the Chief Executive Officer of Customs. This legislation directly affects entities involved in the importation of these specific goods, providing them with a concession in the form of a lower or, in this case, a free rate of customs duty. The application of this instrument is jurisdictional, operating under the Commonwealth’s purview as outlined in the Customs Act 1901. Notably, the Act excludes certain goods from being subject to a TCO, specifically those listed in section 269SJ of the Act. The application process for a TCO includes a core criteria assessment, ensuring that no substitutable goods are produced in Australia, thereby justifying the concession. The TCO does not affect pre-existing rights or liabilities of persons other than the Commonwealth, and it is effective from the date the application was lodged, thereby providing beneficial rights to importers who can apply for duty refunds on imports made since the effective date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0804267, under the Customs Act 1901, revolve around the establishment and application of Tariff Concession Orders (TCOs). Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods, provided these goods are not specified in section 269SJ which outlines those ineligible for TCOs. If an application meets the core criteria, as defined in section 269C, the CEO must issue a TCO. Section 269P(3) mandates that the CEO issue a written TCO order if satisfied that no substitutable goods are produced in Australia, thereby qualifying the goods for a lower customs duty rate.
The obligations imposed by the Act on parties or entities it governs primarily involve the application and assessment process for TCOs. For applicants, such as Freightquip Australia Pty Ltd, this entails submitting an application that meets the core criteria, as outlined in section 269C. The CEO is obligated to assess the application, determine whether the core criteria are met, and if so, issue a TCO. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties before making a decision on the TCO application. The CEO's responsibilities include ensuring that the application does not pertain to goods specified in section 269SJ and that no substitutable goods are produced in Australia as per section 269D.
The Act outlines specific consequences for non-compliance or breaches of its provisions. While the explanatory statement does not explicitly state criminal or civil penalties, the infringement of TCO regulations could potentially lead to financial penalties or other administrative consequences. The instrument itself does not specify maximum penalties but implies that adherence to the established processes and criteria is crucial. The implications of failing to comply with the TCO process could result in the applicant not receiving the tariff concession, thereby not benefiting from the reduced customs duty rate. Furthermore, the Act ensures that the TCO does not affect the rights of any person adversely or impose liabilities for actions taken before the TCO's effective date, protecting the interests of both the Commonwealth and private entities.