EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0916443
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.
Well Ops Sea applied for a TCO in respect of certain collapsible cranes on 14 May 2009.
Instrument
TCO No 0916443 was made on 07 August 2009. It declares that those certain collapsible 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. 0916443 is taken to have come into force on 14 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. 0916443, enacted in 2009, amends the Customs Act 1901 to provide tariff concessions for certain goods, thereby addressing the need for a streamlined process in granting lower rates of customs duty. This instrument was introduced to facilitate the application of tariff concessions where no substitutable goods are produced in Australia, thereby benefiting importers by reducing their customs duty obligations. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated to assess and approve applications for Tariff Concession Orders (TCOs) based on the criteria outlined in the Act. The policy objective of this instrument is to ensure that importers of specified goods, such as collapsible cranes, are not subject to higher rates of customs duty when no Australian-made equivalents exist, thereby supporting fair trade practices and economic efficiency.
The instrument came into effect on the date the application was lodged, 14 May 2009, and no submissions were received in opposition to the application. The TCO does not affect existing rights or impose new liabilities on persons other than the Commonwealth, ensuring that it operates within the legal framework while providing tangible benefits to importers who may qualify for duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods specified in the TCO, granting them a lower rate of customs duty than the general tariff. Any person can apply to the CEO for a TCO, provided the goods are not restricted under section 269SJ of the Act. The CEO must assess whether the application meets the core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The Act provides definitions for key terms such as "substitutable goods" and "ordinary course of business" to ensure clarity and consistency in the application process. If the application meets the criteria, the CEO is mandated to issue a TCO, as demonstrated in the case of TCO No. 0916443 for certain collapsible cranes, which was issued on 7 August 2009, reducing the duty from 5% to free. The process includes a requirement for the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for this particular TCO. The TCO takes effect from the date the application was lodged, providing benefits to importers by allowing them to apply for a refund of duty paid on goods imported since that date, without imposing any liabilities on any person.
Key Provisions
The primary operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0916443, provide for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). Section 269C specifies that a TCO application is deemed to meet the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Furthermore, section 269P(3) mandates that if the CEO determines the application meets the core criteria, a written order must be made, declaring the goods subject to a prescribed tariff concession. Specifically, Instrument TCO No. 0916443, made on 7 August 2009, declares that certain collapsible cranes are subject to a tariff concession under item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general 5% duty rate.
The Act imposes specific obligations on parties applying for a TCO, primarily ensuring that the application meets the core criteria as outlined in section 269C. The CEO must publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the making of the TCO (subsection 269K(1)). This was done for TCO No. 0916443, although no submissions were received. The Act also mandates that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any new liabilities on persons other than the Commonwealth (subsection 269S(1)).
The Act delineates potential consequences for non-compliance with its provisions, though no specific offences are mentioned in the explanatory statement. The penalties for breaches of the Customs Act 1901 can vary widely depending on the nature of the offence but typically include fines and imprisonment. For instance, under the Customs Act, serious breaches can result in fines of up to $22,000 and/or imprisonment for up to five years. In cases involving fraud or smuggling, penalties can be significantly higher, with fines reaching up to $220,000 and imprisonment extending to 25 years. The exact penalties depend on the severity and intent behind the breach, as well as any aggravating factors present in the particular case.