EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937558
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.
Woolworths applied for a TCO in respect of certain stacker crane parts on 06 October 2009.
Instrument
TCO No 0937558 was made on 30 December 2009. It declares that those certain stacker crane 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. 0937558 is taken to have come into force on 06 October 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 Parliament of Australia, established a framework for the administration of customs and excise duties, aiming to regulate the importation and exportation of goods into and out of Australia. Among its provisions, Part XVA of the Act introduced a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). The fundamental issue addressed by this legislation was the need for a streamlined process to provide tariff concessions for specific goods, ensuring economic efficiency and competitiveness. The policy objective behind this scheme is to encourage the import of goods that are not produced in Australia by reducing or eliminating customs duties on these items, thereby facilitating trade and benefiting consumers. Tariff Concession Instrument No. 0937558, made under this authority, specifically provided a tariff concession for certain stacker crane parts, reflecting the legislative intent to support import activities where local production is not feasible.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at providing relief from customs duty on certain goods. The Act applies to entities or individuals who seek to import goods that are not already produced in Australia and for which there are no substitutable alternatives domestically produced. The scope of the Act encompasses a range of industries and transactions involving the importation of goods, specifically targeting those where the application of a TCO would result in tariff relief. The application of the Act is national, applying across the Commonwealth of Australia, and its provisions extend to all states and territories. Notably, the Act excludes certain goods specified in section 269SJ from being subject to a TCO, thereby limiting its application in those specific cases. The Act also allows for the extension or restriction of its application through subordinate instruments, although these are not detailed in the provided text. The instrument in question, TCO No. 0937558, illustrates the application of the Act by reducing the customs duty on certain stacker crane parts to zero, following the CEO’s determination that no substitutable goods were produced in Australia at the time of the application.
Key Provisions
The Tariff Concession Instrument No. 0937558, made under the Customs Act 1901, provides a lower rate of customs duty on certain stacker crane parts, effective from the date of the application (sections 269F and 269P(3)). This lower duty rate, which is free, applies to the specified goods as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995, following a successful application for a Tariff Concession Order (TCO) by Woolworths on 6 October 2009. The general rate of duty on these goods, prior to the concession, is 5%.
Under the Customs Act 1901, the Chief Executive Officer of Customs (CEO) has specific obligations in processing a TCO application. Firstly, the CEO must ensure the application does not concern goods specified in section 269SJ, which are ineligible for TCOs. Secondly, the CEO must verify that the application meets the core criteria, as defined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. Once satisfied with these criteria, the CEO is mandated to make a written order declaring that the goods in question are subject to a specified item in the Customs Tariff Act 1995 (subsection 269P(3)).
Additionally, the Customs Act 1901 imposes certain procedural obligations on the CEO. As per subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit objections if they believe the TCO should not be made. In this case, no submissions were received, facilitating the issuance of TCO No. 0937558 on 30 December 2009. The TCO is deemed to have come into force on the date the application was lodged (subsection 269S(1)), thus on 6 October 2009.
The Tariff Concession Instrument No. 0937558 also stipulates certain consequences for breaches of its provisions. Although the explanatory statement does not explicitly detail the penalties for non-compliance, breaches of the Customs Act 1901 generally can result in both civil and criminal penalties. Civil penalties may include fines, while criminal penalties may encompass imprisonment, reflecting the severity with which the Act treats non-compliance. However, specific maximum penalties are not detailed in the explanatory statement. The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person.