EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900767
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 bucket loader parts on 15 December 2008.
Instrument
TCO No 0900767 was made on 14 April 2009. It declares that those certain bucket loader parts 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. 0900767 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 was enacted to provide a framework for the regulation of customs and excise in Australia. The Tariff Concession Instrument No. 0900767 was introduced to address the specific need to provide tariff concessions for certain bucket loader parts, as requested by Implements Holdings. This instrument, made by the Chief Executive Officer of Customs (CEO) under section 269F of the Act, came into effect on 15 December 2008, the date the application was lodged. The CEO determined that the application met the core criteria, as no substitutable goods were being produced in Australia, thereby allowing for a tariff concession that reduces the duty on these parts from 5% to free. The instrument was published in the Gazette, inviting submissions from any interested parties, although none were received. The rights of importers are positively affected, enabling them to apply for refunds of duty paid on imports since the concession came into effect, while ensuring no disadvantages or liabilities are imposed on any other person.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process for Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to certain goods. This scheme allows the Chief Executive Officer of Customs to issue TCOs if an application meets the specified criteria, notably that there are no substitutable goods produced in Australia in the ordinary course of business. The instrument F2009L01999, TCO No. 0900767, applies to the specific bucket loader parts for which Challenge Implements Holdings made an application on 15 December 2008. The application was accepted as valid, and no submissions were received in opposition to the order, leading to its issuance on 14 April 2009. The TCO, effective from the date of application, sets the duty rate for these parts at free, down from the general rate of 5%, and it benefits importers by allowing them to apply for duty refunds on imports since the effective date. The Act's application is broad, covering all goods subject to customs duty, but excludes goods specified in section 269SJ, which are ineligible for TCOs. The instrument's scope is limited to the specific goods mentioned and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The primary sections of this legislation, under the Customs Act 1901, pertain to the establishment and requirements of Tariff Concession Orders (TCOs) (ss 269C, 269F, 269K, 269P, 269S, 269SJ, 269D, 269E). These sections detail the process through which an applicant, such as Implements Holdings, can apply for a TCO and the criteria the Chief Executive Officer of Customs (CEO) must consider when deciding whether to approve such an application. Specifically, the Act mandates that no substitutable goods must be produced in Australia in the ordinary course of business on the day the application is lodged (s 269C). If this condition is met, the CEO is required to make a written order (TCO) (s 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions on the application and take into account any submissions received (s 269K(1)).
The obligations imposed by this Act on the parties involved, primarily the CEO and the applicant, include ensuring that the application for a TCO is made in accordance with the criteria outlined in section 269C and that any substitutable goods are not produced in Australia on the day the application is lodged. The CEO must also publish a notice in the Gazette and consider any submissions received before making a decision on the application (s 269K(1)). If the CEO is satisfied that the application meets the core criteria, the CEO must make a written order (TCO) (s 269P(3)). The applicant, on the other hand, must provide all necessary information and evidence to support their application and respond to any queries or requests for additional information from the CEO.
Under the Customs Act 1901, there are no explicit offences or penalties outlined for breach of the provisions relating to TCOs. However, failure to comply with the requirements of the Act or the conditions of a TCO may result in the TCO being revoked or the applicant being denied a TCO in the future. In addition, any person who knowingly makes a false or misleading statement in an application for a TCO may be subject to criminal penalties under the Crimes Act 1914. The maximum penalty for such an offence is a fine of up to $22,000 or imprisonment for up to two years, or both (s 13.3 of the Crimes Act 1914).
In summary, the key provisions of this legislation relate to the establishment and requirements of Tariff Concession Orders (TCOs) under the Customs Act 1901. The Act imposes obligations on the Chief Executive Officer of Customs and the applicant to ensure that the application for a TCO is made in accordance with the criteria outlined in the Act and that any substitutable goods are not produced in Australia on the day the application is lodged. Failure to comply with the requirements of the Act or the conditions of a TCO may result in the TCO being revoked or the applicant being denied a TCO in the future. While there are no explicit offences or penalties outlined for breach of the provisions relating to TCOs, any person who knowingly makes a false or misleading statement in an application for a TCO may be subject to criminal penalties under the Crimes Act 1914.