EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840865
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.
John Wagstaff Constructions applied for a TCO in respect of certain pile drivers hammer leaders on 21 November 2008.
Instrument
TCO No 0840865 was made on 27 February 2009. It declares that those certain pile drivers hammer leaders 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. 0840865 is taken to have come into force on 21 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 Tariff Concession Instrument No. 0840865, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, in this case, certain pile drivers hammer leaders, as applied for by John Wagstaff Constructions on 21 November 2008. The instrument was issued on 27 February 2009, following the determination by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia, thereby meeting the core criteria for the tariff concession. This legislative action ensures that the specified goods, which would otherwise attract a 5% duty, are now duty-free, thereby supporting the economic interests of the applicant and benefiting importers by allowing them to apply for duty refunds on imports of these goods since the effective date of 21 November 2008.
Scope and Application
The Customs Act 1901, as amended through Tariff Concession Order No. 0840865, applies to specific imported goods, namely certain pile drivers hammer leaders, which are now subject to a zero rate of customs duty rather than the general rate of 5%. This concession is applicable to any entity or individual importing these goods into Australia. The scope of this Act extends to the entire Commonwealth of Australia, governing the customs duties applicable to these particular imported goods. It is pertinent to note that the Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which explicitly lists goods ineligible for tariff concessions. Furthermore, the Act's application can be influenced by subordinate instruments, which may further define or refine the categories of goods eligible for such concessions. The commencement of this particular TCO on 21 November 2008 ensures that any imports of the specified goods from that date onward are eligible for the duty concession, provided no substitutable goods were produced in Australia in the ordinary course of business at the time of application.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0840865, are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO determines that the application meets the core criteria set out in section 269C, they must make a written order (the TCO) specifying the goods and the applicable tariff concession. Section 269P(3) outlines that if the CEO is satisfied that no substitutable goods are produced in Australia, they must issue the TCO.
The Act imposes several obligations on the parties involved. The CEO must ensure that any TCO application is assessed against the core criteria, specifically checking if no substitutable goods are produced in Australia on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties if they accept the application as valid. John Wagstaff Constructions, the applicant, must provide all necessary information to substantiate their claim that no substitutable goods are produced in Australia. The CEO is also obligated to make a decision on the application without undue delay and to issue the TCO if the criteria are met.
In terms of penalties and consequences for breach, the Customs Act 1901 does not explicitly detail offences or penalties for failing to comply with the TCO process. However, general provisions of the Customs Act 1901 and the Customs Regulations 1999 might apply. These could include fines or imprisonment for knowingly providing false or misleading information in the application process, or for contravening any other provision of the Act. The specific penalties would depend on the nature and severity of the breach, as well as any applicable regulations.
The Tariff Concession Instrument No. 0840865 is designed to benefit importers by reducing the duty on certain pile drivers hammer leaders from the general rate of 5% to free. This change in duty rate is effective from the date the application for the TCO was lodged, which is 21 November 2008, as per subsection 269S(1) of the Customs Act 1901. The rights of third parties, other than the Commonwealth, are protected such that the TCO does not disadvantage them or impose liabilities for actions taken before the registration date. Importers can apply for a refund of duty paid on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.