EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904838
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 Holland applied for a TCO in respect of certain lifting devices on 12 February 2009.
Instrument
TCO No 0904838 was made on 08 May 2009. It declares that those certain lifting devices 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. 0904838 is taken to have come into force on 12 February 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, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and the regulation of imports and exports. Specifically, Part XVA of the Act facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders provide reduced customs duty rates for certain goods, subject to specific criteria being met. The 2009 Explanatory Statement (F2009L03165) details Tariff Concession Instrument No. 0904838, which addresses the problem of high customs duties on certain lifting devices, as per an application by John Holland on 12 February 2009. The CEO determined that no substitutable goods were produced in Australia and thus, no submissions were received against the order, which was subsequently published on 8 May 2009. This TCO sets the duty rate for these devices to free, down from the general rate of 5%, effectively benefiting importers by potentially allowing them to claim refunds for duties paid before the order's effective date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a scheme for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs. These orders apply to specific goods for which a lower rate of customs duty is prescribed. The legislation allows for applications to be made by any person to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act, which excludes certain goods from TCO consideration. For an application to meet the core criteria, it must be established that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must make a written order if satisfied that the application meets these criteria, and the TCO applies to goods specified in the order as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO's commencement date aligns with the day the application was lodged, providing benefits to importers by allowing them to apply for a refund of duty on goods imported since that date. The TCO does not affect existing rights or impose any liabilities on persons other than the Commonwealth in respect of actions taken before the TCO's registration.
Key Provisions
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F (1) allows for applications for TCOs from individuals or entities for specified goods. If an application is not for goods excluded under section 269SJ, the CEO evaluates whether it meets the core criteria set out in section 269C. The core criteria require that no substitutable goods were produced in Australia on the day the application was lodged, with "substitutable goods" defined in section 269D as goods produced in Australia that can serve a similar function or design to the goods in question. The CEO's decision is documented in a written order, as stipulated in section 269P(3). For instance, TCO No. 0904838, issued on 8 May 2009, declared that certain lifting devices were subject to the concessions in item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general 5%.
The Act imposes specific obligations on both the CEO and applicants. The CEO, under section 269K(1), must publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not be granted. This requirement ensures transparency and allows stakeholders to voice their concerns. If no submissions are received, as in the case of TCO No. 0904838, the CEO proceeds to grant the order. Meanwhile, applicants must ensure their submissions meet the criteria outlined in section 269C to be eligible for a TCO.
Breaches of the provisions in the Customs Act 1901, including those related to TCOs, can lead to significant legal consequences. Under section 279 of the Act, offences may result in substantial penalties, including fines and imprisonment. The maximum penalties are set out in the Crimes Act 1914 and can vary depending on the severity of the offence. For example, knowingly making a false statement in an application for a TCO could lead to a fine of up to $22,000 or imprisonment for up to two years, or both, as stipulated in section 308.1 of the Crimes Act 1914. These provisions underscore the importance of compliance with the Act's requirements to avoid severe legal repercussions.