EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835246
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.
Toyota Tsumo Pty Ltd applied for a TCO in respect of certain manipulators on 13 October 2008.
Instrument
TCO No 0835246 was made on 14 January 2009. It declares that those certain manipulators 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. 0835246 is taken to have come into force on 13 October 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. 0835246, enacted in 2009, provides a concession under the Customs Act 1901 to address the need for tariff relief for specific goods where no substitutable goods are produced domestically. This instrument allows for the application of a lower rate of customs duty on certain goods, in this case, manipulators, when it is established that no similar goods are manufactured in Australia. The instrument was developed in response to an application by Toyota Tsumo Pty Ltd, seeking a tariff concession for certain manipulators. The policy objective is to facilitate the import of these goods by reducing the financial burden of customs duties, thereby supporting the importer's business operations without imposing any new liabilities on other parties. The instrument came into effect on the date of the application, 13 October 2008, and no submissions were received against the concession, indicating broad acceptance of the tariff adjustment.
Scope and Application
The Tariff Concession Instrument No. 0835246, made under the Customs Act 1901, applies to entities or individuals seeking tariff concessions for specific goods imported into Australia. This instrument is specifically tailored for goods that are not substitutable with any produced in Australia, allowing for a reduced customs duty rate or even duty-free entry, depending on the provisions of the Customs Tariff Act 1995. The instrument was triggered by an application from Toyota Tsumo Pty Ltd for certain manipulators, and following the Chief Executive Officer of Customs' satisfaction that the core criteria for a tariff concession were met, a written order was issued on 14 January 2009. The application of this instrument is limited to the Commonwealth jurisdiction, and it does not retroactively affect the rights or impose liabilities on any person, except to the beneficial effect of allowing importers to apply for duty refunds on goods imported since the date the tariff concession was deemed to come into force, which is the date the application was lodged. The instrument does not include any exclusions, exemptions, or thresholds beyond those stipulated in the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The primary operative sections of this legislation are sections 269F, 269C, 269P, and 269S, which together govern the process and criteria for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. Section 269C stipulates that an application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P requires the CEO to make a written order if satisfied that the application meets the core criteria, and section 269S sets out the commencement date for the TCO.
The obligations and requirements imposed by the Customs Act 1901 on the parties or entities it governs include the duty of the CEO to determine whether an application for a TCO meets the core criteria and to make a written order if it does. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, Toyota Tsumo Pty Ltd's application for a TCO regarding certain manipulators was accepted and no submissions were received in response to the Gazette notice.
Under the Customs Act 1901, breaches of the provisions for TCOs may result in various offences, penalties, or civil/criminal consequences. While the explanatory statement does not explicitly detail specific penalties for non-compliance with TCO provisions, the general penalties for breaches of the Customs Act can include fines and imprisonment. The maximum penalties for customs offences can vary widely depending on the nature and severity of the offence, with potential fines up to $22,200 for individuals and much higher for corporations, along with imprisonment terms that can extend up to five years. For the specific case of TCOs, failure to adhere to the conditions set out in the order could potentially lead to the revocation of the concession or other administrative actions by Customs.