EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931106
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.
John Wagstaff Constructions applied for a TCO in respect of certain cutter soil mixers parts on 24 August 2009.
Instrument
TCO No 0931106 was made on 13 November 2009. It declares that those certain cutter soil mixers 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. 0931106 is taken to have come into force on 24 August 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 to provide a framework for the administration of customs duties and to regulate the importation and exportation of goods. In particular, Part XVA of the Act facilitates the establishment of Tariff Concession Orders (TCOs) to reduce customs duty on certain imported goods. The Tariff Concession Instrument No. 0931106, issued in 2010, serves to address a specific application for tariff concessions, thereby providing relief to importers of certain cutter soil mixer parts. The instrument was enacted by the Chief Executive Officer of Customs, in accordance with the provisions of the Customs Act 1901, and aims to ensure that such concessions are applied fairly and transparently, in line with the policy objectives of the Act. This legislative instrument ensures that the application of tariff concessions does not adversely affect the rights of any person and provides a mechanism for importers to potentially recover duties paid on eligible goods prior to the concession coming into effect.
Scope and Application
The Customs Act 1901 establishes a framework for the application of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can reduce customs duties on specified goods. The Act applies to any person or entity seeking a reduction in customs duty for goods not produced in Australia and not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act’s geographic reach extends to all of Australia, as it is a Commonwealth Act. The application of the Act is contingent upon the CEO being satisfied that no substitutable goods are produced in Australia in the ordinary course of business. Any exclusions or exemptions are outlined in section 269SJ, which specifies goods that cannot be subject to a TCO. The scope of the Act can be further defined through subordinate instruments, although this particular instance does not extend beyond the primary legislation. The Tariff Concession Instrument No. 0931106 specifically applies to certain cutter soil mixer parts and was made effective from the date the application was lodged, 24 August 2009.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0931106 under the Customs Act 1901 (section 269F) allow for the application of tariff concession orders (TCOs) by individuals or entities. Specifically, section 269C outlines the core criteria that must be met for a TCO to be issued. According to this section, if an application for a TCO is made and the Chief Executive Officer (CEO) of Customs determines that the goods in question are not specified in section 269SJ, which lists goods ineligible for a TCO, the CEO must then assess whether the application meets the core criteria, primarily focusing on whether there are substitutable goods produced in Australia in the ordinary course of business (section 269P). If the CEO is satisfied that no substitutable goods are being produced, they must proceed to issue a TCO.
The obligations imposed by this legislation on the parties involved are quite straightforward. The CEO of Customs is required to review the application to determine if it meets the core criteria specified in section 269C. This involves verifying that no substitutable goods are produced in Australia. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions (subsection 269K(1)). The TCO itself, once issued, becomes effective on the day the application was lodged (subsection 269S(1)). Importantly, the TCO does not retroactively affect the rights of any person other than the Commonwealth, ensuring that no existing liabilities or disadvantages are imposed on non-Commonwealth entities (subsection 269S(2)).
Any breaches of the requirements set forth by the Customs Act 1901 can lead to significant consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can result in substantial penalties. Under the Customs Act, penalties can include fines up to $22,000 for individuals and up to $110,000 for corporations, depending on the nature and severity of the breach. Additionally, criminal charges can be pursued for more serious violations, potentially leading to imprisonment. Given the importance of compliance, entities must ensure they adhere to all requirements to avoid these severe repercussions.