EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905676
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.
Schwing Australia applied for a TCO in respect of certain sludge piston pumps on 19 February 2009.
Instrument
TCO No 0905676 was made on 15 May 2009. It declares that those certain sludge piston pumps 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. 0905676 is taken to have come into force on 19 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, facilitates the application of tariff concession orders (TCOs) to certain goods, thereby providing lower rates of customs duty. This Act was introduced to address the gap in tariff structures that could potentially hinder the competitiveness of Australian industries by making imported goods more expensive. The Customs Act 1901 provides a mechanism for the Chief Executive Officer of Customs to consider and approve TCOs on the basis of specific criteria, such as the absence of substitutable goods produced in Australia. This legislative framework ensures that tariff concessions are granted judiciously, protecting both domestic producers and consumers by maintaining a balance between competitive pricing and fair trade practices. The overall policy objective is to support Australian industries and consumers by potentially reducing the cost of imported goods through tariff concessions, while ensuring that the rights and liabilities of all stakeholders are preserved.
Scope and Application
The Tariff Concession Instrument No. 0905676, made under the Customs Act 1901, applies to the person who submitted the application, in this case Schwing Australia, for a tariff concession order (TCO) regarding certain sludge piston pumps. The application of this instrument extends to the specific goods mentioned, namely those sludge piston pumps that qualify under the specified conditions of the Customs Act. The instrument affects the rate of customs duty applied to these goods, reducing it from a general rate of 5% to a duty-free status, provided that the conditions outlined in the Act are met, specifically that no substitutable goods were produced in Australia at the time of the application. The instrument's jurisdiction is national, as it pertains to the application of customs duties across Australia. The instrument does not specify any exclusions or exemptions other than those outlined in the Customs Act itself, such as the exclusion of goods specified in section 269SJ of the Act. The scope of the Act is further defined and potentially extended through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the particular tariff item under which the goods are to be classified for duty purposes.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0905676, under the Customs Act 1901, pertain to the process and criteria for granting Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, 269S, 269SJ). A TCO is an order made by the Chief Executive Officer of Customs (CEO) that applies a lower rate of customs duty to specified goods. To qualify for a TCO, the goods in question must not have substitutable alternatives produced in Australia and must meet the core criteria outlined in the Act. The CEO must ensure that the application for a TCO is not for goods specified in section 269SJ of the Act, which are ineligible for a concession. If the CEO is satisfied that the application meets the core criteria, they must make a written order (section 269P(3)).
The obligations imposed by the Act on the parties or entities it governs include the requirement for applicants to submit a valid application for a TCO, ensuring that the goods in question meet the specified criteria (sections 269F, 269C). The CEO is obligated to evaluate each application and determine whether it meets the core criteria (section 269P). Furthermore, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be granted (subsection 269K(1)). The CEO must consider any submissions received and make a decision on the application accordingly.
The Act includes provisions for potential offences, penalties, or consequences for breaches. However, the explanatory statement does not specify any particular offences or penalties related to the granting or misuse of TCOs. Nonetheless, any misuse of the concession granted by a TCO could potentially lead to legal repercussions under the Customs Act 1901 or other relevant legislation. It is important for parties to ensure compliance with the terms and conditions of the TCO to avoid any adverse consequences.