EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807826
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.
Western Australian Land Authority applied for a TCO in respect of certain self propelled modular transporters on 13 May 2008.
Instrument
TCO No 0807826 was made on 04 August 2008. It declares that those certain self propelled modular transporters 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. 0807826 is taken to have come into force on 13 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 Customs Act 1901, enacted by the Australian Parliament, provides the framework for regulating the import and export of goods in Australia, including the imposition of customs duties. To address specific economic and trade policy needs, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can lower the customs duty on certain goods, provided that the goods are not substitutable by locally produced items. The explanatory statement for Tariff Concession Instrument No. 0807826, issued under this Act, outlines the process and criteria for granting such concessions. The policy objective is to facilitate trade by reducing the duty burden on certain imported goods, thus potentially enhancing their competitiveness in the Australian market and supporting broader economic objectives. This instrument was introduced to provide tariff concessions for certain self-propelled modular transporters, effective from the date of the application.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to individuals or entities seeking lower customs duty rates on specific goods. The Act allows the Chief Executive Officer of Customs to grant a TCO if certain criteria are met, such as the absence of substitutable goods produced in Australia. The TCO scheme is applicable nationally across Australia, as it is a Commonwealth Act. Notably, the Act excludes goods specified in section 269SJ, which lists items ineligible for tariff concessions. The TCO process begins when an application is submitted and published in the Gazette, inviting any interested parties to submit objections; however, no objections were lodged for this particular TCO. The TCO takes effect from the date the application is lodged, and it does not disadvantage any person's rights as they stood before the registration date nor impose any new liabilities. This specific TCO, Instrument No. 0807826, was made for certain self-propelled modular transporters on 4 August 2008, setting the duty rate at free, which was effective from 13 May 2008.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, section 269P requires the CEO to make a written order, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this case, the TCO No. 0807826 applies to certain self-propelled modular transporters, specifying that they are subject to item 50 of Schedule 4, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved, including the applicant and the CEO. The applicant must ensure that their application complies with the criteria set out in section 269F, which includes avoiding goods listed in section 269SJ. The CEO is obligated to review the application and determine whether it meets the core criteria as per section 269C. If satisfied, the CEO must make a TCO in accordance with section 269P. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). In this instance, no submissions were received, facilitating the CEO’s decision.
Breaching the provisions of the Customs Act 1901 can lead to various consequences, although specific penalties are not detailed within this explanatory statement. Generally, failure to comply with the Act or with a TCO could result in civil or criminal penalties. For instance, knowingly making a false statement in an application for a TCO could lead to criminal charges, while failure to pay the correct duty on goods could result in fines or other civil penalties. However, the exact nature and severity of these penalties would be governed by other sections of the Customs Act and related legislation. In this specific case, the TCO does not impose any liabilities on any person, thereby limiting immediate repercussions for non-compliance related to this order.