EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840876
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.
Cummins South Pacific applied for a TCO in respect of certain generators on 24 November 2008.
Instrument
TCO No 0840876 was made on 27 February 2009. It declares that those certain generators 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. 0840876 is taken to have come into force on 24 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. 0840876, enacted in 2009 under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, thereby facilitating trade and benefiting importers by reducing customs duty rates. This instrument was created in response to an application by Cummins South Pacific for tariff concessions on certain generators, allowing for a reduction from a general rate of 5% to a free rate. The instrument was made after it was confirmed that no substitutable goods were produced in Australia, meeting the core criteria outlined in section 269C of the Customs Act 1901. The objective of the instrument is to support the economic interests of the applicants and importers by lowering the cost of importing these goods, in line with the provisions of the Customs Act 1901 and the Customs Tariff Act 1995. The instrument came into force on the date the application was lodged, 24 November 2008, and ensures that no existing rights or liabilities are adversely affected by its implementation.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) for certain goods, thereby reducing the rate of customs duty applied to those goods. The application for a TCO must be lodged by a person and is subject to the CEO determining whether it meets the core criteria, such as the absence of substitutable goods produced in Australia. TCO No. 0840876 was issued for specific generators, reducing the duty rate from 5% to free, effective from 24 November 2008, the date the application was lodged. This order does not affect any rights or impose liabilities on any person other than the Commonwealth, and importers can apply for duty refunds on goods imported since the effective date. The CEO must also publish a notice in the Gazette inviting submissions against the TCO, although no submissions were received for this particular order.
Key Provisions
The Tariff Concession Instrument No. 0840876 (the Instrument) under the Customs Act 1901 (the Act) sets out provisions regarding Tariff Concession Orders (TCOs) for certain goods, specifically generators in this instance. Under section 269F (2), a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO determines that the application is valid and meets the core criteria outlined in section 269C, a TCO can be issued. In this case, the CEO was satisfied that no substitutable goods were produced in Australia for the generators, thereby meeting the core criteria. As a result, the CEO issued a written order (the TCO) on 27 February 2009, declaring that the certain generators are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff), with a free rate of duty instead of the general rate of 5% (section 269P(3)).
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must decide whether an application meets the core criteria, which includes determining if no substitutable goods were produced in Australia (section 269C). Secondly, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). This process ensures transparency and allows for public input before a decision is made. Additionally, the CEO must ensure that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor impose any liabilities on any person (section 269S(2)).
Breaching the provisions of the Act can result in various civil and criminal consequences. While the explanatory statement does not specify detailed penalties, it is understood that non-compliance with customs regulations generally can lead to fines, imprisonment, or both, depending on the severity of the breach. For instance, knowingly making a false statement or representation in an application for a TCO could be considered a criminal offence under section 270 of the Act, with penalties including fines and imprisonment. Furthermore, failure to comply with the requirements for publishing notices in the Gazette could result in administrative penalties as outlined in the Act.