EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0828807
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.
Imtram Pty Ltd applied for a TCO in respect of certain hydraulic excavator parts on 29 August 2008.
Instrument
TCO No 0828807 was made on 21 November 2008. It declares that those certain hydraulic ecavator 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. 0828807 is taken to have come into force on 29 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 was enacted to manage the import and export of goods in Australia, providing a structured framework for customs duties and tariff regulations. To address specific economic and trade needs, the Act includes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This allows for lower rates of customs duty on goods specified in a TCO, provided certain criteria are met. The Tariff Concession Instrument No. 0828807, made in 2008, is an example of such an order, facilitating tariff concessions for certain hydraulic excavator parts by Intram Pty Ltd. The policy objective of these concessions is to ensure that no substitutable goods are produced in Australia, thereby potentially enhancing the competitiveness and accessibility of imported goods in the market. The process ensures transparency and opportunity for public input before the concession is granted.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a scheme under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking a reduction in customs duty on imported goods by applying for a TCO. The scope of the Act extends to any goods for which a TCO can be applied, provided they are not specified in section 269SJ of the Act as those ineligible for tariff concessions. The Act applies nationally across Australia, given that it is a Commonwealth Act. For a TCO to be granted, the CEO must be satisfied that the application meets core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Subordinate instruments may further refine the application of the Act by specifying additional criteria or processes for TCO applications. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, preserving their rights as at the date of registration, and does not impose any new liabilities on any person.
Key Provisions
The Customs Act 1901, specifically under Part XVA, sets out a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders apply a lower rate of customs duty to goods specified in the order (s 269F). For instance, Intram Pty Ltd applied for a TCO for certain hydraulic excavator parts on 29 August 2008, and this application was subsequently granted, resulting in Instrument TCO No. 0828807 on 21 November 2008. This particular TCO was issued because the CEO determined that no substitutable goods were produced in Australia at the time the application was made (s 269C, s 269P(3)). As per this order, the general duty rate for these parts, which is 5%, is reduced to free.
The Act imposes certain obligations on the parties involved in the TCO process. Firstly, any person can apply for a TCO in respect of goods, provided that the goods are not those specified in section 269SJ of the Act (s 269F). Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons the TCO should not be granted (s 269K(1)). However, in the case of TCO No. 0828807, no submissions were received. Moreover, the TCO is deemed to come into force on the day the application is lodged (s 269S(1)), which in this case was 29 August 2008.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. While the explanatory statement does not detail specific offences, penalties, or consequences under this particular TCO, it is known that breaches of the Customs Act can lead to both civil and criminal penalties. For instance, knowingly making a false statement in a customs document can result in a civil penalty of up to $22,200 for an individual or $111,000 for a corporation, and may also lead to criminal charges with penalties that can include imprisonment. The specific penalties depend on the nature and severity of the breach.