EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804743
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.
Universal Cranes Pty Ltd applied for a TCO in respect of certain self propelled modular trailers on 21 April 2008.
Instrument
TCO No 0804743 was made on 11 July 2008. It declares that those certain self propelled modular trailers 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. 0804743 is taken to have come into force on 21 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 Commonwealth Parliament, establishes a framework for the administration of customs and excise duties in Australia. One of the mechanisms introduced under this Act is the Tariff Concession Order (TCO), which allows for the application of lower rates of customs duty on certain goods. This system aims to support Australian businesses by reducing the cost of imported goods that do not have substitutable local alternatives. The Act empowers the Chief Executive Officer of Customs to make these orders based on specific criteria, including the absence of substitutable goods produced in Australia. The legislative instrument, Tariff Concession Instrument No. 0804743, issued in 2008, provides an example of this process, granting a concession for self-propelled modular trailers, effectively reducing their duty rate from 5% to free. The policy objective behind these concessions is to foster a competitive environment for Australian industries by mitigating the impact of imported goods on local production.
Scope and Application
The Tariff Concession Instrument No. 0804743 applies to Universal Cranes Pty Ltd and their application for a Tariff Concession Order (TCO) concerning certain self-propelled modular trailers. The Act pertains to the Customs Act 1901, which allows for the application of lower rates of customs duty to goods specified in a TCO. The CEO of Customs, upon satisfying the core criteria set out in section 269C of the Act, must make a written order that specifies the goods and the applicable rate of duty. The instrument applies to the Commonwealth and does not disadvantage any person other than the Commonwealth, nor impose any liabilities on such persons in relation to actions taken prior to the registration of the TCO. The instrument extends its application through the issuance of TCOs as subordinate instruments, with the specific TCO No. 0804743 applying to item 50 of Schedule 4 to the Customs Tariff Act 1995. This instrument is effective from the date the application was lodged, 21 April 2008, and provides benefits to importers by potentially allowing them to apply for a refund of duty on goods imported since that date.
Key Provisions
The primary sections of this legislation, particularly sections 269C, 269F, and 269P(3) of the Customs Act 1901, detail the process for applying for and obtaining a Tariff Concession Order (TCO). Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods, provided these goods are not specified in section 269SJ, which lists goods ineligible for TCOs. If the CEO determines that the application meets the core criteria set out in section 269C, they must make a written order (TCO) declaring that the goods are subject to a prescribed tariff concession. Section 269P(3) further clarifies that the CEO must make such an order if satisfied that no substitutable goods are produced in Australia on the date the application is lodged. This process ensures that specific goods, in this case, self-propelled modular trailers, can receive a lower customs duty rate if no suitable substitute goods are being manufactured domestically.
The obligations imposed by this legislation on the parties involved are significant. The CEO of Customs has the responsibility to assess each TCO application against the criteria outlined in section 269C. This involves verifying that no substitutable goods are produced in Australia on the day the application is lodged. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted. If no submissions are received, the CEO proceeds to issue the TCO. For the applicant, such as Universal Cranes Pty Ltd, the obligation is to provide a detailed application supported by necessary evidence that no substitutable goods are produced in Australia. Importers of the goods, on the other hand, benefit from the lower duty rates and can apply for duty refunds on goods imported since the TCO came into effect.
Breaching the provisions of this Act can lead to various consequences, both civil and criminal. If a person provides false information in an application for a TCO, they could be subject to penalties under section 277 of the Customs Act 1901, which includes fines and potential imprisonment. The maximum penalty for making a false or misleading statement can be up to 10,000 penalty units or imprisonment for five years, or both, under section 278. These penalties underscore the seriousness with which the Act treats misrepresentation and ensure compliance with the stipulated requirements. Any failure to adhere to the terms of a TCO or misdeclaration of goods could also result in customs penalties, including the repayment of any benefit obtained through the concession, along with additional fines or duties owed.