EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906323
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 Wagstaff Constructions applied for a TCO in respect of certain track laying binder spreader on 24 February 2009.
Instrument
TCO No 0906323 was made on 15 May 2009. It declares that those certain track laying binder spreader 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. 0906323 is taken to have come into force on 24 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 was enacted to establish the regulatory framework governing the importation and exportation of goods within Australia, including the imposition and collection of customs duties. The Act provides for the creation of Tariff Concession Orders (TCOs) to offer duty relief on certain goods, aiming to address the economic disadvantage faced by Australian businesses that may lack domestic production alternatives for specific goods. Enacted by the Parliament of Australia, the policy objective behind this legislation is to stimulate trade and economic efficiency by facilitating access to competitively priced goods, thus supporting industry competitiveness and consumer choice. TCO No. 0906323, made under the Customs Act 1901, was introduced to provide tariff concessions on certain track laying binder spreaders, allowing these goods to be imported at a reduced rate of duty, thereby benefiting businesses that rely on such equipment.
Scope and Application
The Tariff Concession Instrument No. 0906323 under the Customs Act 1901 applies to any individual or entity seeking a tariff concession order (TCO) for specific goods, in this case, a certain track laying binder spreader. The instrument is applicable to goods that meet the core criteria outlined in section 269C of the Act, which involves determining whether substitutable goods are produced in Australia. The geographic reach of this Act is national, with the application and effect spanning across Australia. The Act excludes goods specified in section 269SJ, which cannot be subject to a TCO. The instrument’s application may be extended or restricted through subordinate instruments, although no such provisions are indicated in this particular context. The commencement of TCO No. 0906323 is on 24 February 2009, the date on which the application for the TCO was lodged, and it does not affect the rights of any person, except to the benefit of importers who may apply for a refund of duty.
Key Provisions
The main sections of Tariff Concession Instrument No. 0906323 under the Customs Act 1901 are 269C, 269B, 269D, 269E, 269F, 269P(3), 269K(1), and 269S(1). These sections define the criteria for Tariff Concession Orders (TCOs) and the process by which the Chief Executive Officer of Customs (CEO) evaluates and issues these orders. Specifically, Section 269F allows for applications for a TCO, while Section 269C outlines the core criteria that must be met, namely, that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the core criteria are satisfied, the CEO must make a written TCO order. The commencement of the TCO is specified in Section 269S(1), which states that it comes into force on the day the application is lodged.
The obligations imposed by this Act on the parties involve ensuring that applications for TCOs are made in accordance with the statutory requirements. The CEO is obligated to evaluate applications under Sections 269F and 269C, ensuring that no substitutable goods were produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting submissions on the application, as stipulated in Section 269K(1). The applicant, in this case, John Wagstaff Constructions, must provide all necessary information to substantiate the application and meet the core criteria. Any person who believes that the TCO should not be made has the right to submit a submission to the CEO within the period specified in the notice.
There are no explicit offences, penalties, or civil/criminal consequences outlined in the sections of the Act that relate to Tariff Concession Orders. However, the implications of failing to meet the criteria or providing false information in the application could result in the CEO declining the application. This could lead to the continued application of the standard customs duty rates to the goods, which in this case would be 5% rather than the zero rate under the TCO. Additionally, any subsequent discovery of non-compliance with the conditions for the TCO could lead to administrative actions to recover any improperly paid refunds or rebates. However, the primary enforcement mechanism appears to be the CEO’s discretion in evaluating and issuing TCOs based on the statutory criteria.