EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0931657
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.
Norton Gold Fields applied for a TCO in respect of certain excavator trailers on 27 August 2009.
Instrument
TCO No 0931657 was made on 13 November 2009. It declares that those certain excavator trailers 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. 0931657 is taken to have come into force on 27 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 Tariff Concession Instrument No. 0931657 was enacted under the Customs Act 1901 to provide tariff concessions for certain excavator trailers, thereby addressing the problem of high customs duties on imported goods that have no Australian-made substitutes. This instrument was introduced by the Chief Executive Officer of Customs in response to an application by Norton Gold Fields, who sought a tariff concession for their excavator trailers. The objective of this legislation is to ensure that no Australian-made goods are being substituted by imported ones, thereby supporting local production where it exists. The instrument was published in the Gazette to allow for any objections, though none were received. The tariff concession came into effect on the date the application was lodged, 27 August 2009, and provides for a duty-free rate for the specified excavator trailers, benefiting importers by potentially allowing them to claim refunds for duties paid prior to the concession's effective date.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the application of tariff concession orders (TCOs) for specific goods, which results in reduced customs duty rates. The Act applies to any person or entity that can apply for a TCO, provided that the goods in question are not specified in section 269SJ as ineligible. The Chief Executive Officer of Customs (CEO) has the authority to grant these concessions if certain criteria are met, including the absence of substitutable goods being produced in Australia. The geographic scope of this Act is national, as it is enforced under the Commonwealth. The CEO’s decision to grant a TCO can be influenced by submissions from the public, although in the case of TCO No. 0931657, no submissions were received. The TCO applies retroactively from the date the application was lodged, in this case, 27 August 2009, and does not affect the rights of any party as at the date of registration, nor does it impose any new liabilities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0931657 are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C defines the core criteria that must be met for an application for a Tariff Concession Order (TCO) to be approved. This includes ensuring that, on the day the application is lodged, no substitutable goods are being produced in Australia. Section 269P(3) specifies that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a written order declaring that the goods in question are subject to a specified concession under the Customs Tariff Act 1995. Section 269S deals with the commencement of the TCO, stating that it takes effect on the day the application is lodged.
The obligations and requirements imposed by the Customs Act 1901 on parties applying for a TCO are primarily on the applicant and the CEO of Customs. The applicant must ensure that their application is made in accordance with the Act and that all criteria are met, particularly that no substitutable goods are produced in Australia. The CEO, on receiving a valid application, must then assess whether the application meets the core criteria and make a decision accordingly. If the CEO decides to grant the TCO, they must publish a notice in the Gazette and allow for any objections before proceeding. The CEO is also required to consult with relevant stakeholders, as per subsection 269K(1) of the Act, although in this case, no submissions were received.
Under the Customs Act 1901, breaches of the provisions related to TCOs can lead to various offences and penalties. While the explanatory statement does not specify exact penalties, breaches of customs laws generally can lead to significant fines and imprisonment. For example, under section 243 of the Customs Act 1901, persons who make false or misleading statements in relation to goods can be fined up to 10,000 penalty units or imprisoned for up to five years, or both. Furthermore, there are civil consequences such as the forfeiture of goods and the imposition of financial penalties. These provisions ensure that the integrity of the customs duty system is maintained and that only eligible goods receive tariff concessions.