EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0921556
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.
Hitachi Construction Material applied for a TCO in respect of certain track laying machines parts on 24 June 2009.
Instrument
TCO No 0921556 was made on 11 September 2009. It declares that those certain track laying machines parts 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. 0921556 is taken to have come into force on 24 June 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 by the Parliament of Australia to provide for the regulation of customs and excise, including the administration of a tariff concession scheme. The Tariff Concession Instrument No. 0921556, made in 2009, addresses the gap in providing tariff concessions for certain imported goods where no substitutable goods are produced in Australia. The instrument was introduced to ensure that industries relying on imported goods can operate efficiently without undue financial burden, thereby supporting economic activities that may be hindered by high customs duties. The Tariff Concession Order (TCO) No. 0921556, which applies to specific track laying machine parts, was made after Hitachi Construction Material applied for the concession, and no objections were raised during the consultation period. The policy objective is to facilitate trade by reducing customs duties on certain goods, thus benefiting importers by potentially allowing them to claim refunds on duties paid prior to the concession's effective date.
Scope and Application
The Tariff Concession Instrument No. 0921556, issued under the Customs Act 1901, applies to the specific goods identified in the instrument, namely certain track laying machine parts. The legislation allows for a concession on the duty payable on these goods, with the application being processed by the Chief Executive Officer of Customs. The Act applies to any individual or entity that imports these specified goods into Australia, providing them with a tariff concession if certain conditions are met. The geographical scope of this legislation is national, applying across all states and territories of Australia. Notably, the instrument does not affect any pre-existing rights or liabilities incurred prior to its registration date, ensuring that no party is disadvantaged retroactively. Exemptions and exclusions are strictly defined within the Customs Act, particularly in section 269SJ, which lists goods ineligible for tariff concessions. The Act may be further extended or restricted through subordinate instruments, although this particular instrument specifies the conditions under which the tariff concession is granted.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0921556, made under the Customs Act 1901, involve the declaration of tariff concession orders (TCO) for certain goods. Specifically, section 269P(3) (subsection 269P(3)) requires that if the Chief Executive Officer (CEO) of Customs is satisfied that an application for a TCO meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed tariff item specified in the order. In this case, the CEO made TCO No. 0921556 on 11 September 2009, declaring that certain track laying machines parts are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with the duty rate for these goods being free, as opposed to the general rate of 5%.
The Customs Act 1901 imposes certain obligations on the parties involved in the TCO process. Firstly, an applicant, such as Hitachi Construction Material, must submit an application to the CEO under section 269F. The CEO must then decide whether the application meets the core criteria set out in sections 269C, 269B, and 269D. If satisfied, the CEO must make a written TCO order as per section 269P(3). Additionally, as per subsection 269K(1), the CEO is required to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made. In this instance, no submissions were received.
The Act also outlines potential consequences for breaches of its provisions. Although the explanatory statement does not specify particular offences or penalties, it is reasonable to infer that failure to comply with the terms of a TCO could lead to legal repercussions. Such consequences might include the imposition of the full applicable duty rate, fines, or other penalties as prescribed by relevant legislation. The Customs Act 1901 and associated regulations likely contain provisions detailing the enforcement mechanisms and penalties for non-compliance. However, these specific details are not elaborated upon in the explanatory statement for TCO No. 0921556.