EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0838092
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 S.A.R.L. applied for a TCO in respect of certain radio remote control operating station on 03 November 2008.
Instrument
TCO No 0838092 was made on 30 January 2009. It declares that those certain radio remote control operating station 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. 0838092 is taken to have come into force on 03 November 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 facilitate the regulation of imports and exports in Australia, ensuring that customs duties are applied appropriately and efficiently. The Tariff Concession Instrument No. 0838092, enacted in 2009, addresses the specific problem of granting tariff concessions for certain goods, thereby reducing the financial burden on businesses that import these items. This instrument was introduced by the Chief Executive Officer of Customs, who is empowered under section 269F of the Act to make Tariff Concession Orders (TCOs) for goods, provided that the application meets the core criteria and no substitutable goods are produced in Australia. The policy objective of this instrument is to ensure that businesses can import certain goods at a lower rate of duty, promoting economic efficiency and competitiveness by reducing the cost of imported goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to goods for which a lower rate of customs duty is specified, contingent upon meeting certain core criteria. An application for a TCO can be submitted by any person, and if the CEO determines that the application pertains to goods not explicitly excluded under section 269SJ and that no substitutable goods are produced in Australia in the ordinary course of business as per sections 269C and 269D, a TCO can be issued. This instrument is applicable on a national level within Australia, affecting industries and entities involved in the import and production of the specified goods. Importantly, the rights of non-Commonwealth entities are protected, ensuring no disadvantage or new liabilities arise from the TCO for actions taken prior to its registration. The application of the Act can be further refined through subordinate instruments, which may extend or restrict its application beyond the core provisions.
Key Provisions
The Customs Act 1901 (the Act) contains provisions that allow for the creation of Tariff Concession Orders (TCOs), which apply a lower rate of customs duty to specific goods. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO concerning certain goods, provided those goods are not specified in section 269SJ as ineligible. The CEO must then determine if the application meets the core criteria outlined in section 269C. This criterion is satisfied if, on the date the application is made, there are no substitutable goods produced in Australia in the ordinary course of business. The terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined in sections 269D, 269E, and 269F, respectively. If the CEO is satisfied that the application meets the core criteria, they must issue a written order, a TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This particular instrument, TCO No. 0838092, was made on 30 January 2009 and applies to certain radio remote control operating stations, with the rate of duty for these goods being free, whereas the general rate is 5%.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made. If no objections are received, the CEO proceeds to issue the TCO. In this instance, the CEO did not receive any submissions. Moreover, section 269S(1) of the Act stipulates that a TCO comes into force on the day the application is lodged. This means that TCO No. 0838092 is effective from 3 November 2008. The Act also ensures that the rights of any person, except the Commonwealth, are not adversely affected by the TCO. Specifically, the rights of importers will be beneficially affected, as they can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 or the terms of a Tariff Concession Order may result in various consequences. The Act does not explicitly outline offences or penalties for breaching its provisions or those of a TCO. However, breaches of the Customs Act 1901 or the Customs Tariff Act 1995 may lead to civil or criminal proceedings, depending on the nature and severity of the breach. Penalties for contraventions of the Customs Act 1901 can include fines and imprisonment. The exact penalties depend on the specific contravention and are outlined in the relevant sections of the Act and associated regulations.