EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0815258
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 applied for a TCO in respect of certain off road vehicles and earth moving equipment parts on 30 June 2008.
Instrument
TCO No 0815258 was made on 26 September 2008. It declares that those certain off road vehicles and earth moving equipment 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 10%. 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. 0815258 is taken to have come into force on 30 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. 0815258 was enacted under the Customs Act 1901 to address a specific gap in the tariff concession scheme by providing relief for certain imported goods. The instrument was introduced to ensure that no substitutable goods were produced in Australia, allowing for tariff concessions on specified items. The Customs Act 1901, enacted by the Commonwealth Parliament, provides a framework for the administration of customs and excise duties and includes provisions for tariff concessions. The policy objective is to facilitate trade by reducing the duty on goods that cannot be substituted by Australian-produced equivalents. The instrument came into effect on 30 June 2008, the date the application was lodged, and it exempts the specified goods from the general rate of duty, effectively setting the duty rate at free. This concession benefits importers who can apply for a refund of duties paid on these goods since the effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity seeking a reduction in customs duty for specific goods through the application process. A TCO applies to goods that are not specified in section 269SJ of the Act and which meet the core criteria set out in section 269C. The application process involves satisfying the CEO that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, as defined by sections 269D, 269E and 269F of the Act. The geographic reach of this Act is national, impacting all importers of the specified goods across Australia. Any exclusions are limited to goods specified in section 269SJ, which cannot be subject to a TCO. The Act may be further extended or restricted through subordinate instruments, though the primary scope and application remain as outlined within the Act itself.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0815258, made under the Customs Act 1901, include sections 269C, 269F, 269K, 269P, 269S, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged, and section 269SJ lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to make a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods. Section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions regarding the application, while section 269S provides that a TCO is effective from the day the application was lodged.
The Act imposes several obligations on the parties involved. The CEO must ensure that a TCO application does not pertain to goods specified in section 269SJ of the Act and must determine whether the application meets the core criteria outlined in section 269C. Upon meeting these criteria, the CEO is required to make a written TCO under section 269P(3). Additionally, as per section 269K, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on the application, although no submissions were received in this instance.
Breaching the requirements of the Customs Act 1901 or failing to comply with a TCO can lead to various penalties and consequences. While the specific penalties for breaches are not detailed in the explanatory statement, the Act generally provides for both civil and criminal penalties. Civil penalties may include fines and other monetary penalties, while criminal penalties can include imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined in accordance with the provisions of the Customs Act 1901 and any related regulations.