EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811334
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 Pty Ltd applied for a TCO in respect of certain mechanical shovels parts on 04 June 2008.
Instrument
TCO No 0811334 was made on 22 August 2008. It declares that those certain mechanical shovels 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. 0811334 is taken to have come into force on 04 June 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. 0811334 was enacted under the Customs Act 1901, to address the issue of facilitating tariff concessions for specific goods that are not produced in Australia and thus cannot be substituted with locally manufactured alternatives. The Tariff Concession Orders (TCOs) scheme, established in Part XVA of the Customs Act 1901, allows the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods, provided they meet the core criteria as outlined in section 269C of the Act. Hitachi Construction Machinery Pty Ltd applied for and was granted a TCO for certain mechanical shovels parts, as no substitutable goods were produced in Australia, aligning with the conditions set out in section 269D of the Act. The Tariff Concession Instrument No. 0811334, published in the Gazette, was made on 22 August 2008 and came into force on 04 June 2008, the date the application was lodged, in accordance with subsection 269S(1) of the Act. The policy objective is to ensure that tariff concessions are granted where appropriate, thereby benefiting importers by reducing their duty liabilities on certain imported goods.
Scope and Application
The Tariff Concession Instrument No. 0811334 under the Customs Act 1901 applies to the specific case of mechanical shovel parts sought by Hitachi Construction Machinery Pty Ltd, which was granted a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs. The Act allows for TCOs to be made in respect of goods where the CEO determines that no substitutable goods are produced in Australia. This particular TCO, effective from 4 June 2008, exempts the specified mechanical shovel parts from the general customs duty rate of 5%, applying a rate of duty of free instead. The legislation is confined to the Commonwealth jurisdiction and pertains to the import of goods, specifically those that do not have Australian-made substitutes. Any person or entity importing these goods will benefit from the reduced duty rate, while existing rights and liabilities under the law remain unaffected for actions taken prior to the TCO's effective date.
Key Provisions
The primary operative sections of this Tariff Concession Order (TCO) are sections 269F, 269C, 269P, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for certain goods. If the CEO determines that the application meets the core criteria set out in section 269C, they must make a written order declaring the goods to which the concession applies (section 269P). Section 269S addresses the commencement of the TCO, which is effective from the date the application is lodged.
The Act imposes specific obligations on both the CEO and applicants. The CEO must ensure that an application for a TCO does not pertain to goods specified in section 269SJ, which are ineligible for tariff concessions. The CEO must also determine whether the application meets the core criteria by verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting any interested party to submit objections if they believe the TCO should not be granted (subsection 269K(1)).
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. If the CEO does not properly assess an application or improperly grants a TCO, there could be legal repercussions, including judicial review or revocation of the TCO. The Act does not specify particular offences or penalties for breaches in this context but generally, breaches of customs regulations can lead to civil or criminal penalties, including fines and imprisonment. The exact penalties would depend on the nature and severity of the breach.
In summary, the Tariff Concession Instrument No. 0811334 applies a zero duty rate to certain mechanical shovels parts as of 4 June 2008, the date the application was lodged. The CEO must ensure the application meets the core criteria, which involves verifying that no substitutable goods were produced in Australia. Any failure to adhere to the requirements of the Act may lead to civil or criminal penalties, although specific penalties are not outlined in the provided text.