EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814158
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.
Caterpillar of Australia Ltd applied for a TCO in respect of certain earth moving machines and excavator parts on 23 June 2008.
Instrument
TCO No 0814158 was made on 12 September 2008. It declares that those certain earth moving machines and excavator 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. 0814158 is taken to have come into force on 23 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 Customs Act 1901 was enacted by the Australian Parliament to regulate customs and excise, providing a framework for the collection of duties and taxes on goods imported into Australia. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for a reduction or waiver of customs duty on certain goods, under specific conditions. The problem or gap that this legislative framework was introduced to address is the facilitation of access to specific goods that are not produced domestically, ensuring that Australian businesses and consumers can access competitively priced goods without undue burden from customs duties.
In response to an application by Caterpillar of Australia Ltd, the Tariff Concession Instrument No. 0814158 was enacted on 12 September 2008. This instrument declares that certain earth moving machines and excavator parts are subject to a free rate of duty, as no substitutable goods were produced in Australia at the time of the application. This measure was introduced to support the operational needs of Caterpillar of Australia Ltd, providing them with tariff concessions that align with the objectives of the Customs Act 1901. The policy objective here is to assist Australian businesses by reducing the cost of importing specific goods that are crucial for their operations, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Customs Act 1901, specifically as modified by Tariff Concession Instrument No. 0814158, applies to the customs duty imposed on certain goods entering Australia. This Act is pertinent to both individuals and entities involved in the import of specified goods, particularly those who seek tariff concessions for earth moving machines and excavator parts. The application of this Act is nationwide, covering all jurisdictions under the Commonwealth of Australia, and it does not differentiate based on state or territory boundaries. The Act facilitates the process by which these goods can be imported at a lower rate of customs duty, provided they meet the criteria outlined in the Act, which include the absence of substitutable goods produced in Australia. This tariff concession does not apply to goods specified in section 269SJ of the Act, which are ineligible for such concessions. The application process and the criteria for concessions may be further detailed or amended through subordinate instruments, thereby extending or restricting their application as necessary.
Key Provisions
The Tariff Concession Instrument No. 0814158 under the Customs Act 1901 applies specific provisions to certain earth moving machines and excavator parts. According to section 269P(3) of the Act, if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, the CEO must issue a written order (section 269P(3)). This particular TCO, issued on 12 September 2008, declares that the specified goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5% (section 269P(3)). The TCO came into force on 23 June 2008, the date the application was lodged, as per subsection 269S(1) of the Act.
The obligations imposed by the Act on parties such as Caterpillar of Australia Ltd, who applied for the TCO, include ensuring that the goods in question do not have substitutable equivalents produced in Australia. This is a core criterion specified in section 269C of the Act. The CEO must also be satisfied that no such substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269D and 269E of the Act. The CEO has a duty to publish a notice in the Gazette inviting submissions from any person who might oppose the TCO, as outlined in subsection 269K(1) of the Act. In this case, no submissions were received.
For breaches of the provisions outlined in the Tariff Concession Instrument, there are no specific offences or penalties mentioned within the explanatory statement. However, any failure to comply with the core criteria for issuing a TCO, or any misuse of the concessions provided by the TCO, could potentially result in legal consequences under the broader provisions of the Customs Act 1901. The Act generally provides for enforcement actions, including fines and imprisonment, for breaches of its provisions. The exact penalties would depend on the nature and severity of the breach, as well as other relevant laws and regulations.