EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806089
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.
Radius Cranes applied for a TCO in respect of certain flat top tower crane on 01 May 2008.
Instrument
TCO No 0806089 was made on 18 July 2008. It declares that those certain flat top tower crane 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. 0806089 is taken to have come into force on 01 May 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 Tariff Concession Instrument No. 0806089, enacted in 2008, is a legislative measure under the Customs Act 1901, designed to address the need for tariff concessions on specific imported goods. This instrument was introduced to facilitate the reduction or elimination of customs duties on particular goods, thereby promoting economic efficiency and competitiveness within Australia. The instrument was created by the Chief Executive Officer of Customs, in accordance with the provisions of the Customs Act, and was intended to provide tariff relief where no substitutable goods were produced domestically. The primary objective, as stated in the explanatory statement, is to ensure that Australian businesses and importers can access goods at reduced duty rates, which in turn supports broader economic objectives such as fostering industry growth and reducing costs for businesses reliant on imported materials. The instrument came into effect on the date of the application, 1 May 2008, and does not retroactively affect the rights or liabilities of any parties other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0806089, made under the Customs Act 1901, applies to the concession of customs duty for certain flat top tower cranes. This instrument was issued following an application by Radius Cranes, and it provides a zero rate of duty for the specified cranes, effectively exempting them from the general 5% duty rate under the Customs Tariff Act 1995. The application of this instrument is restricted to goods that were not produced in Australia in the ordinary course of business as of the date the application was lodged. The Chief Executive Officer of Customs must determine whether the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia. This instrument operates under the Commonwealth jurisdiction and its effects are contingent upon the CEO's satisfaction of the application's criteria. The instrument came into force on 1 May 2008, the date on which the application was lodged, and does not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation concern the making and effects of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269C). Specifically, section 269F of the Act allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, including that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (section 269C), the CEO must make a written order (section 269P(3)). This instrument, TCO No. 0806089, declares that certain flat top tower cranes are subject to a tariff concession, with a duty rate of free, as opposed to the general rate of 5% (Schedule 4, item 50 to the Customs Tariff Act 1995).
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that applications for TCOs are assessed against the core criteria (section 269C), which includes verifying that no substitutable goods are being produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. Additionally, the TCO must be registered and will come into force on the date the application was lodged (subsection 269S(1)).
In terms of offences and penalties, the Act does not explicitly detail criminal or civil penalties for non-compliance with the TCO process or the requirements of a TCO. However, any misuse or fraudulent claims in relation to the concessions granted by a TCO may attract penalties under other relevant laws. Importers can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person, nor does it impose any liabilities on any person (subsection 269S(2)).
In summary, the Tariff Concession Order No. 0806089, which was made under the Customs Act 1901, provides a tariff concession for certain flat top tower cranes, reducing the duty rate from 5% to free. The CEO must ensure that the core criteria are met before making such an order and must publish a notice in the Gazette inviting submissions. There are no specified penalties for breaches of the TCO process, but any fraudulent activity related to the concessions may be subject to penalties under other laws. The TCO does not disadvantage any person or impose liabilities on any person, and it beneficially affects the rights of importers who can apply for duty refunds.