EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836840
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 applied for a TCO in respect of certain exhausts parts and accessories on 24 October 2008.
Instrument
TCO No 0836840 was made on 16 January 2009. It declares that those certain exhausts parts and accessories 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. 0836840 is taken to have come into force on 24 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. 0836840 was enacted in 2009 under the Customs Act 1901 to provide tariff concessions on certain exhaust parts and accessories. The instrument was introduced to address the gap where there were no locally produced substitutable goods, thus satisfying the core criteria for tariff concessions as outlined in the Customs Act. This legislative measure was introduced by the Chief Executive Officer of Customs, in accordance with section 269F of the Act, following an application by Caterpillar of Australia on 24 October 2008. The policy objective was to facilitate the import of specific goods by providing a tariff concession, thereby benefiting importers by potentially allowing them to claim refunds on duties paid on these goods since the effective date of the concession. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) which lower the rate of customs duty on certain goods. These orders are issued by the Chief Executive Officer of Customs (CEO) upon application, provided the goods do not fall under the exclusions listed in section 269SJ of the Act and meet the core criteria stipulated in sections 269C, 269B, 269D, and 269E. The application process involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. The geographic reach of the Act is national, as it pertains to the importation of goods into Australia, and applies to entities or individuals seeking to import the specified goods. The Act does not disadvantage any person's rights as they stood on the date of the application, and it does not impose any liabilities on persons other than the Commonwealth. The application of the Act may be extended or restricted through subordinate instruments, although this specific Explanatory Statement does not elaborate on such provisions.
Key Provisions
The primary operative sections of the Tariff Concession Order No. 0836840, as referenced in sections 269C, 269F, and 269P(3) of the Customs Act 1901, provide the framework for the concession of customs duties on specific goods. Section 269F outlines the process for applying for a Tariff Concession Order (TCO), while section 269C details the core criteria that the application must meet, such as the absence of substitutable goods produced in Australia on the application date. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied with the application, they must issue a written TCO. This order, as seen in TCO No. 0836840, specifies that certain exhaust parts and accessories will have a duty-free status under item 50 of Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved, particularly the applicant and the CEO. For the applicant, the primary obligation is to submit a valid application that meets the core criteria outlined in section 269C. The applicant must provide sufficient evidence to demonstrate that no substitutable goods are produced in Australia at the time of application. For the CEO, the obligation includes reviewing the application, ensuring it adheres to the criteria, and making a decision within the stipulated timeframe. Additionally, the CEO must publish a notice in the Gazette inviting public submissions on the application, as required by section 269K(1). In this instance, no submissions were received, indicating public acceptance or lack of opposition to the concession.
Breach of the requirements outlined in the Customs Act 1901 can lead to various consequences. For example, if an applicant submits a false or misleading application, they could face civil or criminal penalties. The exact penalties are not specified within the provided text, but typically, such breaches could result in fines or other legal repercussions. Furthermore, any party that deliberately circumvents the provisions of a TCO or provides incorrect information to secure a concession may also face legal action. The severity of the penalties would depend on the nature and extent of the breach, with the potential for significant fines or other sanctions under Australian law.