EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0843974
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 soil mixer cutter on 15 December 2008.
Instrument
TCO No 0843974 was made on 06 March 2009. It declares that those certain soil mixer cutter 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. 0843974 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 Australian Parliament, provides a framework for the administration of customs duties and the regulation of imports and exports. Part XVA of the Act introduces a scheme for Tariff Concession Orders (TCOs) which allows for the reduction or exemption of customs duties on certain goods, thereby addressing the issue of potentially excessive customs burdens on specific imports. The explanatory statement for Tariff Concession Instrument No. 0843974, issued under this scheme, outlines the process by which the Chief Executive Officer of Customs (CEO) assesses and approves applications for TCOs, ensuring that the concessions are only granted when no suitable Australian-made alternatives exist. This instrument, effective from 15 December 2008, was made to benefit importers by reducing the duty on certain soil mixer cutters from 5% to free, following an application by John Wagstaff Constructions and subsequent verification by the CEO that no substitutable goods were produced domestically. The CEO's decision was made without opposition, and the policy objective is to support Australian importers by alleviating undue financial burdens.
Scope and Application
The Customs Act 1901 applies to a broad range of entities, including individuals and businesses, that engage in the importation of goods into Australia. Specifically, the Act addresses the application and creation of Tariff Concession Orders (TCOs) that may be applied to goods, thus affecting their customs duty rates. The primary focus of the Act in this context is on the CEO of Customs, who has the authority to make TCOs if certain criteria are met. These criteria include ensuring that no substitutable goods are produced in Australia on the date the application is lodged. The Act also ensures that the rights of importers are positively affected by such orders, enabling them to apply for refunds on duties paid on goods imported since the TCO's effective date. The geographic scope of the Act is national, covering all importation activities within Australia, and its application is not restricted by state or territory boundaries. The Act allows for the extension and restriction of its application through subordinate instruments, which can include regulations and further legislative amendments.
Key Provisions
The main operative sections of the Customs Act 1901, specifically the Tariff Concession Order (TCO) No. 0843974, involve several key provisions. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods (s 269F). If the CEO determines that the application is not for goods specified in section 269SJ, which are ineligible for a TCO, they must assess whether the application meets the core criteria outlined in section 269C. The CEO must make a written order, a TCO, if satisfied that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). This instrument was made on 6 March 2009 and declared that the soil mixer cutters in question are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%.
The Customs Act imposes obligations on parties involved with TCOs. The CEO must ensure that the application does not pertain to goods specified in section 269SJ and verify that no substitutable goods were produced in Australia. Upon meeting these criteria, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons against the TCO (s 269K(1)). The TCO process also involves ensuring that the rights of persons, other than the Commonwealth, are not adversely affected or that they do not incur liabilities for actions taken before the TCO's registration. Importers can apply for a refund of duties on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
Any breach of the provisions set out in the Customs Act could result in various penalties or consequences. While the specific legislation does not detail penalties for non-compliance with TCOs, breaches of customs regulations generally may lead to civil and criminal penalties. Civil penalties can include fines and the recovery of unpaid duties, while criminal penalties might involve imprisonment, reflecting the severity of the breach. The exact penalties would depend on the nature and extent of the violation, as outlined in other sections of the Customs Act and related legislation.