EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835869
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.
Caterpillar Of Australia Pty Ltd applied for a TCO in respect of certain track laying machines parts on 16 October 2008.
Instrument
TCO No 0835869 was made on 14 January 2009. It declares that those certain track laying machines 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. 0835869 is taken to have come into force on 16 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. 0835869, enacted in 2009 under the Customs Act 1901, was introduced to address the specific need for tariff concessions on certain imported goods that do not have substitutable Australian-produced alternatives. This instrument allows for a concession to be granted on customs duty, thereby facilitating the import of these goods at a reduced rate or even free of duty, contingent on the absence of substitutable Australian goods. The Customs Act 1901, enacted by the Australian Parliament, provides the legislative framework for such concessions, with the aim of supporting industries by lowering costs and potentially enhancing competitiveness. The Chief Executive Officer of Customs is the enacting body responsible for deciding on tariff concession orders based on the criteria set out in the Act, including the absence of substitutable Australian-produced goods. This legislative instrument aims to streamline the importation process for certain goods, ultimately benefiting importers by reducing their duty liabilities.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0835869, establishes a framework under which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) for specific goods, thereby reducing their customs duty. This applies to entities or individuals who apply for and meet the criteria set out in the Act, particularly in respect of goods that are not substitutable by any produced in Australia. The Act operates on a national level within Australia, affecting all importers who deal with the specified goods. However, it explicitly excludes any goods mentioned in section 269SJ of the Act, which outlines those ineligible for TCOs. The TCO itself does not affect the rights of any party as they stood before its registration and imposes no new liabilities. Instead, it provides a benefit to importers by potentially allowing them to claim refunds for duties paid on the specified goods since the effective date of the TCO, which coincides with the date the application was lodged.
Key Provisions
The key operative sections of the Customs Act 1901, as implemented through Tariff Concession Order No. 0835869, include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269S. Section 269F allows for the application of a Tariff Concession Order (TCO) by a person seeking a lower rate of customs duty on specified goods. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria, including the absence of substitutable goods produced in Australia, a TCO can be issued under section 269P. The core criteria are defined in sections 269C and 269B, which specify that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are found in sections 269D and 269E.
The Act imposes specific obligations on the CEO when processing a TCO application. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from interested parties regarding the potential issuance of the TCO, as outlined in section 269K. In the case of TCO No. 0835869, no submissions were received. Additionally, the CEO must ensure that the application meets the core criteria set forth in section 269C before issuing the order. The TCO itself, once issued, provides a lower rate of duty for the specified goods, as detailed in the Customs Tariff Act 1995.
There are no explicit offences or penalties mentioned in the text for breaches of the requirements under this specific TCO. However, general compliance with the Customs Act 1901 and associated regulations is expected. Failure to comply with customs regulations can result in penalties such as fines or imprisonment under other sections of the Act, though these are not detailed in the provided text. For instance, under section 134 of the Customs Act 1901, unauthorised importation or exportation of goods can lead to penalties, including fines of up to $22,000 or imprisonment for up to two years, or both, for individuals, and higher penalties for corporations.