EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824443
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.
Sustainable Organics Pty Ltd applied for a TCO in respect of certain articulated wheel loaders on 01 August 2008.
Instrument
TCO No 0824443 was made on 24 October 2008. It declares that those certain articulated wheel loaders 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. 0824443 is taken to have come into force on 01 August 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 Parliament of Australia, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders, which can be made by the Chief Executive Officer of Customs, allow for the application of a lower rate of customs duty on specified goods. The Act was introduced to address the need for flexibility in tariff regulation to support industry needs and economic policies. Tariff Concession Instrument No. 0824443, made on 24 October 2008, pertains to a specific application by Sustainable Organics Pty Ltd for articulated wheel loaders, declaring these goods to be subject to a zero-duty rate under the Customs Tariff Act 1995. The instrument came into effect on 01 August 2008, and the CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for the concession. This instrument ensures that the rights of importers are positively affected and does not disadvantage any person or impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0824443, under Part XVA of the Customs Act 1901, applies to any person who applies to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO) in respect of certain goods. This instrument specifically pertains to articulated wheel loaders applied for by Sustainable Organics Pty Ltd on 01 August 2008. The TCO applies to these particular goods and sets a duty rate of free, whereas the general rate is 5%. The legislation is applicable nationally, and the TCO was made on 24 October 2008, effective from the date the application was lodged. The Act mandates that the CEO must consider the application against specific criteria, ensuring that no substitutable goods are produced in Australia. Any exclusions or exemptions are determined based on the definitions provided in the Act, specifically regarding goods produced in Australia, ordinary course of business, and substitutable goods. The TCO does not disadvantage any person other than the Commonwealth nor impose any liabilities on them. Importers, however, stand to benefit from this concession as they may apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0824443 are sections 269C, 269B, and 269P(3) of the Customs Act 1901. Section 269C stipulates that a Tariff Concession Order (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. Section 269B defines "goods produced in Australia," "ordinary course of business," and "substitutable goods," while subsection 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order (TCO). Instrument TCO No. 0824443, issued on 24 October 2008, declared that certain articulated wheel loaders are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with a duty rate of free, instead of the general rate of 5%.
The Act imposes several obligations and requirements on parties involved with the TCO. Section 269F allows a person to apply to the CEO for a TCO in respect of goods. The CEO must then determine if the application meets the core criteria set out in section 269C, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. Subsection 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person who believes the TCO should not be made to lodge a submission. This was done for TCO No. 0824443, but no submissions were received. Once the CEO is satisfied that the application meets the core criteria, they must issue a TCO, as outlined in subsection 269P(3). The TCO is deemed to have come into force on the day the application was lodged, as specified in subsection 269S(1).
Any breaches of the provisions outlined in the Customs Act 1901 may result in various civil or criminal consequences. While the explanatory statement does not specify penalties, breaches of customs legislation can generally lead to penalties including fines, imprisonment, or both, depending on the severity and intent behind the breach. For instance, knowingly providing false information in an application for a TCO could potentially lead to criminal charges under sections 269SJ and 269K of the Act. Additionally, failure to comply with the terms of the TCO once issued could result in financial penalties or other civil liabilities for the party in breach. The maximum penalties for such breaches would be determined by the specific nature of the offence and relevant provisions of the Customs Act and associated regulations.