EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902630
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.
Baulderstone Hornibrook applied for a TCO in respect of certain clamshell grabs on 27 January 2009.
Instrument
TCO No 0902630 was made on 17 April 2009. It declares that those certain clamshell grabs 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. 0902630 is taken to have come into force on 27 January 2009.
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 comprehensive framework for the regulation of customs and excise in Australia. The Act includes provisions for Tariff Concession Orders (TCOs) which reduce the rate of customs duty on certain imported goods. This initiative was introduced to address the gap in providing relief for imported goods that have no Australian-made alternatives, thus promoting fair competition and facilitating trade. Enacted by the Commonwealth Parliament, the policy objective of the Act, as it pertains to TCOs, is to encourage the importation of goods that are not produced domestically, thereby benefiting consumers and businesses by potentially lowering the cost of these goods. The explanatory statement for Tariff Concession Instrument No. 0902630 clarifies the process and criteria for granting a TCO, ensuring that the application meets specified conditions before the CEO issues the concession.
Scope and Application
The Tariff Concession Order No. 0902630 under the Customs Act 1901 applies to certain clamshell grabs, providing a lower rate of customs duty for these goods as specified in the order. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders if the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia in the ordinary course of business. This particular order was made on 17 April 2009, following an application by Baulderstone Hornibrook on 27 January 2009. The order specifies that these clamshell grabs are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively applying a free rate of duty instead of the general rate of 5%. The order does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. It is applicable on the date the application was lodged, which is 27 January 2009, and benefits importers by allowing them to apply for a refund of duty on goods imported since this date.
Key Provisions
The Tariff Concession Instrument No. 0902630 under the Customs Act 1901 (the Act) provides for a lower rate of customs duty for certain clamshell grabs. This instrument, issued on 17 April 2009, applies to the goods specified in the instrument and sets the duty rate at free, as opposed to the general rate of 5% (sections 269C, 269F). The CEO of Customs must consider an application for a Tariff Concession Order (TCO) and decide whether it meets the core criteria. Specifically, the CEO must be satisfied that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these criteria, they must issue a written TCO.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application for a TCO is valid and meets the core criteria set out in the Act. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections to the TCO if they believe it should not be made (subsection 269K(1)). Once a TCO is made, it is deemed to have come into force on the day the application was lodged, not the day it was issued (subsection 269S(1)).
Any breaches of the requirements under this Act could lead to penalties. While the specific penalties are not detailed in the explanatory statement, the Act generally provides for both civil and criminal penalties for non-compliance with its provisions. These may include fines or imprisonment, depending on the nature and severity of the breach. The CEO has the authority to enforce the provisions of the Act and ensure compliance, which may include taking legal action against those who do not comply with the TCOs or other requirements of the Act. The Act's provisions are designed to ensure that the duty concessions are properly applied and that the rights of all parties are protected.