EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811915
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.
Esko Australia Pty Ltd applied for a TCO in respect of certain basket loading and unloading plant on 06 June 2008.
Instrument
TCO No 0811915 was made on 15 August 2008. It declares that those certain basket loading and unloading plant 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. 0811915 is taken to have come into force on 06 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. 0811915 was enacted under the Customs Act 1901 to address the issue of tariff concessions for specific goods, in this case certain basket loading and unloading plant. This instrument was introduced to provide relief to businesses by lowering the rate of customs duty on these goods, thereby making them more competitively priced. The Customs Act 1901 allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs (CEO) if certain criteria are met, primarily that no substitutable goods are produced in Australia. In the case of Esko Australia Pty Ltd, the CEO issued TCO No. 0811915 on 15 August 2008 after determining that no such substitutable goods were being produced domestically. The policy objective behind this legislation is to facilitate the import of goods that are not domestically produced, thereby supporting industries reliant on imported equipment and potentially stimulating economic activity by reducing costs for businesses.
Scope and Application
The Tariff Concession Instrument No. 0811915 under the Customs Act 1901 applies specifically to certain basket loading and unloading plant as requested by Esko Australia Pty Ltd. This Instrument is operational at the Commonwealth level, extending its reach across the entirety of Australia. The primary application of this legislation is to facilitate the concession of customs duties for the specified goods, provided that no substitutable goods were produced in Australia in the ordinary course of business as of the date the application was lodged. This Instrument, once registered, confers benefits to importers by allowing them to apply for refunds on duties paid on these goods since the commencement date of the Instrument. Importantly, it does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage them or impose any liabilities for actions taken prior to the registration date. The scope of the Instrument is limited to the specified goods and does not extend to any other types of goods not mentioned in the application.
Key Provisions
The Customs Act 1901 (the Act) facilitates the creation of Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to certain goods (s 269F). The CEO of Customs is responsible for making these orders if an application is received and the core criteria are met (s 269C). The core criteria include ensuring that no substitutable goods are produced in Australia at the time the application is lodged (s 269C, s 269P(3)). In this case, TCO No. 0811915 was issued for certain basket loading and unloading plant, which now attract a duty rate of free, down from the general rate of 5% (s 269P(3), Schedule 4, Customs Tariff Act 1995).
The Act imposes several obligations on parties involved in the TCO process. The applicant must submit a valid application that meets the core criteria, ensuring that no substitutable goods are produced in Australia at the time of application (s 269C). The CEO must review the application and, if satisfied that it meets the criteria, publish a notice in the Gazette inviting submissions from interested parties and make the TCO (s 269K(1), s 269P(3)). The CEO must also ensure that any TCO does not adversely affect the rights of non-Commonwealth persons as at the date of registration and does not impose liabilities for actions taken before the registration date (s 269S(1)).
Failure to comply with the requirements of the Act may result in civil or criminal consequences. Specifically, subsection 269Q(1) of the Act states that knowingly making a false or misleading statement in an application for a TCO is an offence, with a maximum penalty of 10,000 penalty units or imprisonment for five years, or both. Additionally, any person who contravenes the Act or the Regulations may be subject to fines, with the specific amount depending on the nature and severity of the breach. For instance, contravening the Customs Act 1901 may result in fines up to 10,000 penalty units or imprisonment for five years, or both, under subsection 269Q(1).