EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0843890
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.
Challenge Implements Holdings applied for a TCO in respect of certain parts for bucket loaders on 15 December 2008.
Instrument
TCO No 0843890 was made on 06 March 2009. It declares that those certain parts for bucket loaders 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. 0843890 is taken to have come into force on 15 December 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, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties, among other things. One of its purposes is to allow for the issuance of Tariff Concession Orders (TCOs) which can lower the customs duty on certain goods, provided that certain criteria are met. The Act was introduced to facilitate trade by reducing the cost of imported goods through tariff concessions, thereby supporting economic growth and competitiveness. The Customs Act 1901, through its provisions, allows the Chief Executive Officer of Customs to make TCOs that apply reduced rates of customs duty on goods, under certain conditions. The problem or gap this legislation addresses is the potential for high import costs to hinder trade and economic activity, by making it more affordable to import specific goods that do not have local substitutes.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation applies to individuals and entities that apply for a TCO in relation to specific goods, provided that the goods are not excluded under section 269SJ of the Act. The application process requires the CEO to assess whether the goods in question meet the core criteria, particularly that no substitutable goods are produced in Australia at the time of application. The geographic scope of this Act is national, with the TCOs applying across Australia. Notably, the Act does not disadvantage any person, including the rights of importers who can apply for a refund of duties under certain regulations. The issuance of TCOs extends the application of the Act through subordinate instruments, which are subject to consultation and publication requirements.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0843890, under the Customs Act 1901, concern the process and criteria for granting Tariff Concession Orders (TCOs). Section 269F (1) allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning goods. If the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO, the CEO must evaluate whether the application meets the core criteria (section 269C). These criteria include the condition that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269P(3)). If the CEO is satisfied that the application meets these criteria, they must issue a TCO, as stipulated in section 269P(3).
The obligations imposed by the Act on the parties or entities it governs primarily revolve around the application process and the criteria for granting a TCO. An applicant must ensure their application complies with the Act and does not pertain to goods that are ineligible for a TCO. The CEO, on the other hand, is obliged to assess the application against the core criteria and make a decision in writing within the stipulated timeframe. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit their views on the application (section 269K(1)). This transparency measure ensures that the decision-making process is inclusive and considers all relevant perspectives.
In terms of penalties and consequences for breach, the Customs Act 1901 does not explicitly outline specific offences or penalties related to the process of applying for or making a TCO. However, general provisions within the Act regarding customs duties and other regulatory breaches may apply. For example, wilful contraventions of the Act or Regulations may result in fines or imprisonment. The maximum penalties for such offences can vary, but they are typically significant to ensure compliance with customs regulations. It is important for all parties involved to adhere to the legal requirements to avoid any potential legal repercussions.