EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0838633
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.
Equipment Component Holdings applied for a TCO in respect of certain grabs on 05 November 2008.
Instrument
TCO No 0838633 was made on 30 January 2009. It declares that those certain grabs 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. 0838633 is taken to have come into force on 05 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 provide a framework for the administration of customs duties and related matters. One of the mechanisms introduced by the Act to facilitate trade is the provision for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on certain goods. Enacted by the Australian Parliament, this legislation aims to streamline the process for applying for tariff concessions and ensure that goods which are not produced domestically are subject to reduced duty rates, thereby promoting trade and economic efficiency. The Tariff Concession Instrument No. 0838633, made under the Customs Act, was introduced to address the specific needs of Equipment Component Holdings in relation to certain grabs, ensuring they benefit from a zero rate of duty by confirming that no substitutable goods were produced in Australia. The instrument was designed to provide clarity and expedite the tariff concession process, while also allowing for public consultation to maintain transparency and fairness in its application.
Scope and Application
The Tariff Concession Instrument No. 0838633 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods imported into Australia. The instrument was made by the Chief Executive Officer of Customs following an application by Equipment Component Holdings for certain grabs. The Act allows for the application of a lower rate of customs duty on goods specified in a Tariff Concession Order (TCO) if certain conditions are met, including that no substitutable goods are produced in Australia. The application of the TCO is governed by the core criteria outlined in sections 269C, 269B, and 269D of the Act, ensuring that the goods in question do not have local alternatives and are produced in the ordinary course of business. The TCO is effective from the date the application was lodged, and it provides a duty-free rate for the specified goods, reducing the general rate of duty from 5% to free. The legislation also provides a mechanism for public consultation and ensures that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on them. The TCO can be amended or extended through subordinate instruments if necessary, thereby allowing for flexibility in managing tariff concessions.
Key Provisions
The main sections of Tariff Concession Instrument No. 0838633 (TCO No. 0838633) under the Customs Act 1901 (the Act) revolve around the application and implementation of Tariff Concession Orders (TCOs). Section 269F (2) allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application is not for goods specified in section 269SJ of the Act, the CEO must assess if it meets the core criteria outlined in section 269C. If the application satisfies these criteria, the CEO is mandated to issue a written TCO as per section 269P(3). This TCO specifies the goods and the applicable duty rate under Schedule 4 of the Customs Tariff Act 1995 (the Tariff).
The obligations imposed by the Act on the parties involved are primarily on the CEO and the applicant. The CEO must accept valid applications for TCOs and ensure they meet the core criteria. The applicant must ensure their application complies with the stipulations of the Act, including that the goods in question are not those listed in section 269SJ and that they are not substitutable by goods produced in Australia, as defined by sections 269D and 269E. Furthermore, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any person to lodge submissions opposing the TCO, as required by section 269K(1).
Breaching the provisions of the Customs Act 1901 can result in both civil and criminal consequences. The Act does not specify maximum penalties for breaches of TCOs directly within the explanatory statement, but penalties for breaches of customs laws generally can be substantial. Under the Customs Act, penalties can include fines and imprisonment, with the exact penalties depending on the severity and intent of the breach. For example, knowingly making a false statement in an application for a TCO could result in fines up to $22,200 for individuals or $111,000 for corporations, along with potential imprisonment terms. The severity of penalties underscores the importance of compliance with the Act's provisions.