EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910048
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.
Radius Cranes applied for a TCO in respect of certain tower cranes on 25 March 2009.
Instrument
TCO No 0910048 was made on 12 June 2009. It declares that those certain tower cranes 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. 0910048 is taken to have come into force on 25 March 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, provides a framework for the imposition of customs duty on imported goods. The Act was amended to include Tariff Concession Orders (TCOs), a mechanism by which the Chief Executive Officer of Customs may reduce or eliminate customs duty on certain imported goods under specific conditions. This legislative change was introduced to address the gap where certain imported goods, which were not being produced domestically and were necessary for particular uses, were subjected to customs duty despite the lack of local production. The policy objective behind this initiative was to facilitate the importation of goods that could not be substituted by Australian-made products, thereby supporting industries that rely on imported components or materials.
The explanatory statement details Tariff Concession Instrument No. 0910048, made on 12 June 2009, which grants a tariff concession for certain tower cranes. This was in response to an application by Radius Cranes on 25 March 2009, where the CEO determined that no substitutable goods were produced in Australia. Consequently, the instrument declares that these tower cranes are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, down from the general rate of 5%. The TCO was published in the Gazette, inviting objections, but none were received. The concession came into effect on the date of application, 25 March 2009, and does not affect existing rights or impose new liabilities, providing potential duty refunds for importers under the Customs Regulations.
Scope and Application
The Tariff Concession Instrument No. 0910048 applies to the goods specified in the instrument, namely certain tower cranes, and is an extension of the Customs Act 1901. The Act applies to any person or entity seeking tariff concessions for goods imported into Australia. The instrument was made under section 269P of the Customs Act, which allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide a lower rate of customs duty for specified goods, provided certain criteria are met. This instrument was effective from 25 March 2009, the date on which the application for the concession was lodged. The instrument does not apply to goods specified in section 269SJ of the Customs Act, which lists those goods that are ineligible for tariff concessions. Additionally, the instrument does not affect the rights of any person, except the Commonwealth, as at the date of registration and does not impose any liabilities on any person. The instrument also does not extend or restrict application through subordinate instruments.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0910048, as referenced in the Customs Act 1901 (sections 269C, 269F, 269K, 269P, 269S, and 269SJ), revolve around the creation and implementation of Tariff Concession Orders (TCOs). The main sections, in plain English, require that the Chief Executive Officer (CEO) of Customs must consider applications for TCOs and determine if they meet specific criteria, such as the absence of substitutable goods produced in Australia. If the CEO is satisfied, they must make a written TCO order, which can result in a lower rate of customs duty for the specified goods (section 269F). Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO (section 269K). The TCO is considered to come into force on the date the application was lodged (section 269S). The CEO is required to ensure that the TCO does not disadvantage any person or impose liabilities on them for actions taken before the TCO's registration (section 269SJ).
The obligations imposed by this Act on the parties or entities it governs include the requirement for applicants to provide sufficient information to demonstrate that the application meets the core criteria, particularly the absence of substitutable goods produced in Australia (section 269C). The CEO must diligently assess these applications, consult with relevant parties as stipulated by the Act, and ensure transparency by publishing notices in the Gazette (section 269K). Furthermore, the CEO must ensure that the TCO does not disadvantage any person or impose any new liabilities on them (section 269SJ). Importers who benefit from the TCO can apply for a refund of duty on goods imported since the TCO's effective date (Regulations, paragraph 126(1)(r)).
In terms of consequences for breaches, the Act does not explicitly detail specific offences or penalties for failing to comply with the provisions of the TCO or the process for applying for a TCO. However, any non-compliance with the Act’s requirements or misuse of the TCO could potentially lead to civil or criminal consequences under broader customs legislation. For example, knowingly making a false statement in an application could be considered fraud under section 236 of the Customs Act 1901, which carries a maximum penalty of 10 years imprisonment. Additionally, any failure to remit duties owed or other customs-related infractions could lead to further civil or criminal penalties as outlined in the broader customs legislation.