EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912668
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.
Vestas Australia applied for a TCO in respect of certain tower lifting units swl 40t on 16 April 2009.
Instrument
TCO No 0912668 was made on 03 July 2009. It declares that those certain tower lifting units swl 40t 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. 0912668 is taken to have come into force on 16 April 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 Tariff Concession Instrument No. 0912668 was enacted in 2009 under the Customs Act 1901 to address the specific need for tariff concessions for certain goods that were not being produced in Australia. The Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties and allows for the creation of Tariff Concession Orders (TCOs) to lower customs duties on goods under certain conditions. The policy objective of this instrument was to facilitate the import of certain tower lifting units swl 40t by granting them a free rate of duty, as no substitutable goods were produced in Australia at the time of the application. The instrument was made by the Chief Executive Officer of Customs following an application from Vestas Australia and after no objections were received in response to a published notice inviting submissions. The TCO came into effect on the date the application was lodged, benefiting importers without imposing any liabilities or disadvantaging other persons.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods, granting them a lower rate of customs duty as outlined in the Customs Tariff Act 1995. An application for a TCO can be submitted by any person, and the CEO must ensure that the goods do not fall under the category of goods specified in section 269SJ of the Customs Act, which are ineligible for tariff concessions. If the CEO determines that the application meets the core criteria—primarily, the absence of substitutable goods produced in Australia in the ordinary course of business—a TCO is issued. The CEO's decision is subject to consultation, where the CEO invites submissions from interested parties, although no submissions were received for TCO No. 0912668. This TCO, effective from the date of the application, provides tariff concessions on certain tower lifting units swl 40t, setting their duty rate to free, whereas the general rate is 5%. Importantly, the TCO does not retroactively affect the rights of any person, ensuring that no existing liabilities or disadvantages are imposed on those importing the goods before the order was issued.
Key Provisions
The main operative sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, and section 269C, which sets out the core criteria for making a TCO. Under section 269C, 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. If the CEO is satisfied that the application meets the core criteria, they 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 applies (section 269P(3)).
The Act imposes specific obligations and requirements on parties involved in the TCO process. The CEO must decide whether a TCO application meets the core criteria as outlined in section 269C of the Act. The CEO must also ensure that any substitutable goods are not produced in Australia in the ordinary course of business at the time of the application. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who believes that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). If no submissions are received, the CEO can proceed to make the TCO.
The Act also outlines potential civil and criminal consequences for breaches. Although specific penalties are not detailed in the Explanatory Statement, breaches of customs regulations, including improper applications or fraudulent claims, can lead to significant penalties. Typically, under the Customs Act, breaches can result in fines and, in more severe cases, imprisonment. The precise penalties depend on the nature and severity of the breach, with the potential for both civil penalties, such as fines, and criminal penalties, including imprisonment, being applicable.
In summary, section 269F allows for the application of a TCO, while section 269C outlines the criteria for such an order. The CEO must verify these criteria and publish notices to invite submissions. Failure to comply with the Act's requirements can lead to penalties, although the specifics are not detailed in the Explanatory Statement. The TCO process aims to ensure that only eligible goods receive tariff concessions, thereby benefiting importers while maintaining the integrity of the customs duty system.