EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0924242
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.
CDAP Consulting Pty Ltd applied for a TCO in respect of certain stacker and/or reclaimer parts on 9 July 2009.
Instrument
TCO No 0924242 was made on 2 October 2009. It declares that those certain stacker and/or reclaimer 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.
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. 0924242 is taken to have come into force on 9 July 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 administration of customs duties and related matters. The Act includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for reduced customs duty rates on specified goods. This scheme was introduced to address the need for economic flexibility and support for certain industries by allowing lower customs duty rates on goods where there are no substitutable Australian-produced alternatives. The Tariff Concession Instrument No. 0924242, made on 2 October 2009, exemplifies this provision by granting a concession for certain stacker and/or reclaimer parts, reducing their duty from the general rate of 5% to free. This concession was made following an application by CDAP Consulting Pty Ltd and was effective from 9 July 2009, the date of the application. The policy objective is to facilitate trade and support industries by reducing the cost of imported goods where appropriate.
Scope and Application
The Tariff Concession Instrument No. 0924242 under the Customs Act 1901 applies to entities or individuals seeking tariff concessions for specific goods, namely certain stacker and/or reclaimer parts. The instrument is concerned with the application of a lower rate of customs duty on these goods, which was initiated by CDAP Consulting Pty Ltd on 9 July 2009. The process involves the Chief Executive Officer of Customs determining whether the application meets the core criteria set forth in the Act, specifically that no substitutable goods are produced in Australia in the ordinary course of business. If these criteria are met, the CEO must issue a Tariff Concession Order, which in this case was done on 2 October 2009, resulting in a zero duty rate for the specified goods, down from the general rate of 5%. The application of this instrument extends across the Commonwealth of Australia, and it does not disadvantage any person other than the Commonwealth nor impose any liabilities on persons other than the Commonwealth. The rights of importers are beneficially affected as they can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). These orders apply lower rates of customs duty to specified goods. A TCO application must be made by a person and will be considered by the CEO, provided it does not concern goods listed in section 269SJ, which are ineligible for TCOs (s 269SJ). The core criteria for a TCO, outlined in section 269C, require that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, a written TCO is issued, specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)).
The obligations imposed by the Customs Act 1901 on parties or entities it governs include the requirement for applicants to ensure their applications meet the core criteria and that no substitutable goods are produced in Australia on the day of application (s 269C). The CEO is mandated to assess the validity of TCO applications against these criteria and to publish notices in the Gazette inviting submissions from any person who believes a TCO should not be made (s 269K(1)). Furthermore, the CEO must make a written TCO if the application meets the core criteria (s 269P(3)). The Act also imposes an obligation on the CEO to ensure that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO (s 269S).
Breaching the provisions of the Customs Act 1901, including making a false or misleading application for a TCO, can lead to both civil and criminal consequences. Civil penalties may include fines and, in some cases, the requirement to pay back any benefits gained from the breach. Criminal penalties, including imprisonment, may also apply depending on the severity and intent behind the breach. The specific maximum penalties are not detailed in the explanatory statement but are outlined elsewhere in the Act and related legislation. Compliance with the Act is crucial to avoid these penalties and to ensure the fair and proper administration of customs duties.