EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0827254
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.
Bruce Stevens Bulk Commodities applied for a TCO in respect of certain bulk material handling mechanical grabs on 20 August 2008.
Instrument
TCO No 0827254 was made on 14 November 2008. It declares that those certain bulk material handling mechanical grabs 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. 0827254 is taken to have come into force on 20 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 Tariff Concession Instrument No. 0827254 was enacted under the Customs Act 1901 to provide tariff concessions for specific goods that would otherwise be subject to a general rate of duty. This legislative instrument was introduced to address the issue of applying for tariff concessions on goods not produced in Australia, thereby ensuring that importers are not disadvantaged by customs duties on non-domestic products. The instrument was made by the Chief Executive Officer of Customs and is intended to facilitate trade by reducing the duty on certain imported goods, thereby encouraging the importation of these goods by making them more competitively priced relative to locally produced alternatives. This initiative aligns with the broader policy objective of the Customs Act to streamline trade processes and promote economic efficiency through targeted tariff reductions.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods and provide for a lower rate of customs duty, and are subject to certain conditions, including the core criteria outlined in section 269C of the Act. This Act applies to individuals or entities that seek to import goods that may be eligible for tariff concessions, as long as the goods do not fall under the prohibited list specified in section 269SJ. The CEO must determine if the application for a TCO meets the criteria that no substitutable goods were produced in Australia in the ordinary course of business. The application process requires publication in the Gazette to invite submissions from interested parties, although no submissions were received for TCO No. 0827254. Once a TCO is registered, it applies retroactively from the date the application was lodged, with no adverse effect on existing rights or liabilities of parties other than the Commonwealth. This legislative framework allows for the dynamic adjustment of customs duties to support economic interests and trade policies within Australia.
Key Provisions
The main operative sections of this legislation include sections 269C, 269B, 269D, 269E, 269P(3), and 269SJ of the Customs Act 1901, which detail the criteria for making a Tariff Concession Order (TCO). Section 269F allows an individual or entity to apply for a TCO for specified goods. If the Chief Executive Officer of Customs (CEO) determines that the application meets the core criteria, as outlined in section 269C, and that the goods are not specified in section 269SJ, a TCO will be made. The TCO is published in the Gazette and becomes effective from the date the application was lodged, as per section 269S(1).
The obligations imposed by this Act on the parties involved are primarily on the CEO, who must review the TCO application to ensure it meets the core criteria. This involves verifying that no substitutable goods were produced in Australia on the date the application was lodged, as per sections 269B and 269C. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as required by section 269K(1). If no submissions are received, the CEO must proceed to make the TCO.
Any breaches of the conditions set out in the Tariff Concession Instrument No. 0827254 could lead to civil or criminal consequences. While the explanatory statement does not specify particular offences or penalties, breaches of the Customs Act 1901 generally may attract penalties under the Crimes Act 1914, which can include fines and imprisonment depending on the severity of the breach. The maximum penalties are determined by the specific provisions of the Customs Act 1901 and related legislation.
The Tariff Concession Instrument No. 0827254 specifically applies to certain bulk material handling mechanical grabs, reducing the duty rate from the general rate of 5% to free. This concession does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person. Importers of these goods will have the right to apply for a refund of duty paid on goods imported since the date the TCO came into force, as per Regulation 126(1)(r). This concession benefits importers by reducing their customs duty obligations, without imposing any retroactive liabilities.