EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915254
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.
Rpg Pty Ltd applied for a TCO in respect of certain trolley power on 07 May 2009.
Instrument
TCO No 0915254 was made on 24 July 2009. It declares that those certain trolley power 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. 0915254 is taken to have come into force on 07 May 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. 0915254 was enacted in 2009 under the Customs Act 1901, with the aim of facilitating tariff concessions for specific goods that are not produced in Australia. The instrument was introduced to address the gap where certain imported goods could benefit from lower customs duty rates if they are not locally produced and do not have substitutable alternatives in the Australian market. The instrument was enacted by the Chief Executive Officer of Customs, following an application by Rpg Pty Ltd for tariff concessions on certain trolley power. The instrument came into effect on the date the application was lodged, 7 May 2009, and provided a zero percent duty rate for these goods, which contrasts with the general rate of 5%. The instrument's policy objective was to ensure that importers of such goods would not be disadvantaged and could potentially apply for duty refunds on imports since the effective date of the concession.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking tariff concessions on imported goods that meet specific criteria, particularly where such goods are not produced in Australia and have no substitutable alternatives. The scope of the Act extends to the national level, with the CEO of Customs having the authority to issue TCOs that affect the importation process across Australia. The Act includes exclusions, particularly for goods specified in section 269SJ, which are ineligible for tariff concessions. Additionally, the application of the Act can be further defined through subordinate instruments, which may provide detailed guidelines and conditions for issuing TCOs. The TCO No. 0915254, for example, was issued after the CEO determined that no substitutable goods were produced in Australia, thereby allowing for a tariff concession on certain trolley power.
Key Provisions
The Tariff Concession Instrument No. 0915254, pursuant to the Customs Act 1901, pertains to a specific concession granted on customs duty rates for certain trolley power. Section 269P(3) of the Act mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, they must issue a written order applying a reduced duty rate to the specified goods. This particular TCO, issued on 24 July 2009, applies to certain trolley power and declares them to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively setting their duty rate at free, whereas the general rate would have been 5%.
The obligations under this legislation primarily rest with the CEO of Customs, who is required to evaluate TCO applications and ensure they meet the core criteria as outlined in sections 269C and 269SJ of the Act. This involves verifying that no substitutable goods are produced in Australia at the time of the application. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons to oppose the TCO. In this case, no submissions were received, which likely facilitated the swift issuance of the TCO.
In terms of compliance, entities and individuals affected by this TCO must ensure they are aware of the reduced duty rates applicable to the specified goods. Importers, in particular, have the right to apply for a refund of any duty paid on goods imported since the TCO came into force, as stipulated under paragraph 126(1)(r) of the Regulations. The legislation ensures that no existing rights or liabilities are adversely affected by the issuance of the TCO, meaning that any person other than the Commonwealth is not disadvantaged or imposed with new liabilities due to the TCO.
Breaching the provisions of the Customs Act 1901 or the terms of a TCO can lead to various legal consequences. While specific offences and penalties are not detailed in the explanatory statement, general penalties for breaches of customs regulations can include fines and imprisonment. For example, section 233 of the Customs Act 1901 provides that a person who knowingly or recklessly makes a false statement or representation in connection with the importation or exportation of goods can be subject to penalties including fines and imprisonment. The exact penalties depend on the severity of the breach, but they can be significant, underscoring the importance of compliance with the Act’s requirements.