EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844546
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.
Sandvik Pty Ltd applied for a TCO in respect of certain articulated electric loaders on 19 December 2008.
Instrument
TCO No 0844546 was made on 13 March 2009. It declares that those certain articulated electric 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. 0844546 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0844546, enacted in 2009, addresses the issue of providing tariff concessions for specific imported goods, thereby aligning with the overarching framework established by the Customs Act 1901. This legislative instrument facilitates the reduction or elimination of customs duties on certain goods, enhancing the competitive landscape for Australian businesses and potentially lowering costs for consumers. The instrument is enacted by the Chief Executive Officer of Customs, pursuant to the provisions set forth in the Customs Act 1901, and aims to ensure that tariff concessions are granted under stringent conditions that prevent the displacement of domestic production. This approach is intended to balance the interests of international trade with the protection of local industries.
Scope and Application
The Tariff Concession Instrument No. 0844546, under the Customs Act 1901, applies to articulated electric loaders for which Sandvik Pty Ltd applied for a Tariff Concession Order (TCO). The TCO applies to the goods specified in the instrument and is effective as of the date the application was lodged, 19 December 2008. The Act allows the Chief Executive Officer of Customs to grant a TCO if no substitutable goods are produced in Australia in the ordinary course of business, as defined in the Act. This specific TCO provides for a zero rate of duty on the articulated electric loaders, effectively reducing the general rate of duty from 5% to free. The instrument does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth, and it allows importers to apply for a refund of duty on goods imported since the effective date of the TCO. The instrument does not cover any goods that are specified as ineligible for TCOs under section 269SJ of the Act.
Key Provisions
The Tariff Concession Instrument No. 0844546, under the Customs Act 1901, outlines specific provisions for the application and implementation of a Tariff Concession Order (TCO). Section 269F (1) allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, which includes those that cannot be subject to a TCO, the CEO must then assess whether the application meets the core criteria set out in section 269C. The core criteria require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that these criteria are met, they must issue a written TCO as per section 269P(3), which declares the goods in question are subject to a specific tariff item in Schedule 4 of the Customs Tariff Act 1995.
Entities or individuals seeking a TCO must adhere to the obligations set forth by the Act. They must ensure that their application is valid and meets the criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the application date. Additionally, they must provide all necessary documentation and information to substantiate their claim. Upon acceptance of the application, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as stipulated in section 269K(1). The CEO must then consider any submissions received before making a final decision.
Failure to comply with the requirements of the Customs Act 1901 can result in various consequences. While the explanatory statement does not explicitly detail criminal or civil penalties for non-compliance, it is understood that breaches of customs regulations can lead to significant legal repercussions. The CEO has the authority to impose fines and other penalties under the Act for non-compliance, and severe breaches may result in criminal charges. The maximum penalties for such offences can vary, but they are typically substantial, reflecting the seriousness of evading customs duties or misrepresenting information in an application for a TCO. The specifics of penalties would be outlined in relevant sections of the Customs Act 1901 and associated regulations.