EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0824732
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.
Wirtgen Australia Pty Ltd applied for a TCO in respect of certain cold asphalt recycled mixtures mixing plants on 4 August 2008.
Instrument
TCO No 0824732 was made on 24 October 2008. It declares that those certain cold asphalt recycled mixtures mixing plants 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. 0824732 is taken to have come into force on 4 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 Australian Parliament, establishes a framework for the administration of customs and excise duties. The Act provides for the establishment of a scheme under which Tariff Concession Orders (TCOs) may be made to provide tariff concessions for certain goods. The Customs Act 1901 was introduced to address the need for a structured approach to managing customs duties and concessions to support trade and industry within Australia. In this context, Tariff Concession Instrument No. 0824732 was made under the authority of the Customs Act 1901 to provide tariff concessions for certain cold asphalt recycled mixtures mixing plants, reflecting a policy objective to support specific industries by reducing the duty on particular goods. The instrument was implemented to ensure that no substitutable goods were produced in Australia, thereby qualifying these specific plants for the tariff concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals or entities seeking tariff concessions for goods not produced domestically, allowing for a lower customs duty rate for these specific goods. The TCO mechanism operates under the condition that no substitutable goods are produced in Australia at the time of application, with the CEO required to assess the application against the core criteria outlined in the Act. Once the CEO is satisfied that the application meets the criteria, a TCO is issued, specifying the applicable tariff concession. The geographic reach of this legislation is national, as it pertains to customs duties across Australia. TCO No. 0824732, for example, concerns certain cold asphalt recycled mixtures mixing plants and was issued after the CEO determined that no substitutable goods were produced in Australia. This TCO exempts these specific goods from the general 5% duty rate, imposing a duty-free status instead. The Act also mandates public consultation, requiring the CEO to publish notices in the Gazette, although no submissions were received for this particular TCO. The TCO’s commencement date aligns with the date the application was lodged, ensuring that the rights of importers are protected and that no retroactive liabilities are imposed on any party.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they pertain to Tariff Concession Orders (TCOs), include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO. Section 269C outlines the core criteria that an application must meet, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Sections 269B, 269D, and 269E define key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', respectively. If the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to make a written order (a TCO) specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved in the TCO process. The CEO must review any TCO application to determine if it meets the core criteria outlined in section 269C. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to lodge submissions if they believe the TCO should not be granted. Importantly, the CEO must consider any submissions received and decide whether to proceed with the TCO. Once a TCO is issued, it provides tariff concessions to the applicant, typically lowering or eliminating customs duty on specified goods. The Act also requires that TCOs be published and come into force on the day the application was lodged (subsection 269S(1)).
There are no explicit criminal or civil penalties outlined in the explanatory statement for breaches related to TCOs. However, any failure by the CEO to properly process an application or to consider submissions could potentially lead to legal challenges or administrative reviews. The Act ensures that the rights of non-Commonwealth persons are not adversely affected by the TCO, and that no new liabilities are imposed on any person as a result of the TCO. Importers, however, may benefit from the ability to apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.