EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836430
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 oil coolers on 21 October 2008.
Instrument
TCO No 0836430 was made on 16 January 2009. It declares that those certain oil coolers 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. 0836430 is taken to have come into force on 21 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. 0836430, enacted under the Customs Act 1901, addresses the issue of applying for tariff concessions on specific goods to ensure that businesses can operate more efficiently by reducing the customs duty on certain imported goods. This instrument was introduced to provide relief to businesses by lowering the rate of customs duty on specified goods, thereby facilitating trade and encouraging the importation of necessary items that are not produced domestically. The enacting body is the Chief Executive Officer of Customs, who is empowered under section 269F of the Act to decide on tariff concession orders if certain criteria are met. The policy objective is to streamline the importation process and support economic activities by making imported goods more affordable.
The instrument was applied in response to a request by Caterpillar Of Australia Pty Ltd for tariff concessions on certain oil coolers. The CEO of Customs determined that no substitutable goods were produced in Australia, thus satisfying the core criteria outlined in the Act. The tariff concession resulted in the specified oil coolers being subject to a duty rate of free, down from the general rate of 5%. This change was effective from the date the application was lodged, 21 October 2008, with no adverse impact on the rights of any parties as per the provisions of the Customs Act.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, allowing for the application of tariff concession orders (TCOs) to provide lower rates of customs duty. Specifically, the Act permits the Chief Executive Officer of Customs to make TCOs under Part XVA, subject to certain criteria, including that no substitutable goods are produced in Australia in the ordinary course of business. The application of a TCO, such as Tariff Concession Instrument No. 0836430, which was made on 16 January 2009, applies to the specific goods outlined in the instrument, in this case, certain oil coolers. The TCO process requires public consultation, with the CEO publishing a notice in the Gazette inviting submissions, although in this instance, no submissions were received. The TCO operates under the Customs Act 1901 and extends its application through the Customs Tariff Act 1995, which defines the tariff items applicable to the goods in question. The instrument does not impose any liabilities or affect the rights of any person other than the Commonwealth, and the rights of importers are beneficially affected by the ability to apply for refunds of duty on the goods since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0836430, are found within Part XVA of the Customs Act 1901. These sections concern the process and criteria for granting Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F (1) allows a person to apply to the CEO for a TCO in respect of goods, provided the goods are not specified in section 269SJ as ineligible. The CEO must then assess whether the application meets the core criteria as outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, a TCO is issued, as described in section 269P(3).
The obligations and requirements imposed by the Act on the parties it governs include the duty of the CEO to evaluate TCO applications promptly and fairly. The CEO must ensure that the application complies with the eligibility criteria set out in section 269C and must make a written TCO if these criteria are met. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO, as mandated by subsection 269K(1). Should no submissions be received, the CEO proceeds with the issuance of the TCO.
The legislation also outlines potential consequences for breaches of its provisions. However, this particular explanatory statement does not specify any particular offences, penalties, or civil/criminal consequences for breaches. Typically, breaches of customs regulations can lead to significant penalties, including fines and imprisonment. The maximum penalties depend on the severity of the breach and can vary widely based on the specific circumstances and the discretion of the court. Generally, customs-related offences can result in fines up to several thousand dollars and imprisonment for terms ranging from a few months to several years, depending on the gravity of the violation.
In summary, Tariff Concession Instrument No. 0836430 provides a framework for the CEO to grant tariff concessions on certain goods if specific criteria are met. The process involves evaluating applications against eligibility criteria and publishing notices for public submissions. While the specific penalties for breaches are not detailed in this explanatory statement, breaches of customs regulations can result in significant fines and imprisonment.