EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940177
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 reclaimer machine parts on 23 October 2009.
Instrument
TCO No 0940177 was made on 15 January 2010. It declares that those certain stacker and reclaimer machine 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. 0940177 is taken to have come into force on 23 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, as amended, provides a framework for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs (CEO) to offer lower customs duty rates for certain goods. Enacted by the Parliament of Australia, this legislation addresses the gap in the duty structure that may benefit industries by lowering the cost of importing specific goods not produced locally. The Tariff Concession Instrument No. 0940177, made on 15 January 2010, exemplifies this process by granting tariff concessions on stacker and reclaimer machine parts, thereby reducing the general duty rate from 5% to free. The policy objective here is to support industries by reducing import costs, which can stimulate economic activity and competitiveness without disadvantaging any existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0940177, applies to the concession of customs duty on specific imported goods that meet certain criteria. The Act specifically addresses the process by which Tariff Concession Orders (TCO) can be made by the Chief Executive Officer of Customs, effectively reducing the duty payable on goods that are subject to a TCO. The application of a TCO is contingent upon the absence of substitutable goods being produced in Australia, as defined under the Act, and subject to certain exclusions, such as goods specified in section 269SJ. The application process involves a formal submission by interested parties, with opportunities for consultation and public notice provided as stipulated in the Act. This legislation operates nationally within Australia, encompassing all entities and individuals involved in the importation of the specified goods, and its effects are limited to the imposition or reduction of customs duties as per the prescribed tariff schedules.
The Tariff Concession Instrument No. 0940177 specifically pertains to stacker and reclaimer machine parts, which are granted a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995. This instrument took effect from 23 October 2009, the date on which the application was lodged, and it applies to all importers of these goods. The instrument ensures that no person, except the Commonwealth, is disadvantaged by the application of the TCO, nor is any new liability imposed on them. The rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the commencement date of the TCO. The scope of this legislation is therefore focused on facilitating the importation of specified machinery parts by removing associated customs duties.
Key Provisions
The main operative sections of this legislation pertain to the process and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not concern goods specified in section 269SJ, which are ineligible for a TCO, the CEO must decide if the application meets the core criteria set out in section 269C. If the application is deemed to meet these criteria, the CEO must make a written TCO order as per section 269P(3). In this specific case, TCO No. 0940177 was issued for certain stacker and reclaimer machine parts on 15 January 2010, declaring these goods to be subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general 5%.
The obligations imposed by this legislation on the parties involved include the requirement for the CEO to consider applications for TCOs and to make a decision based on whether the application meets the core criteria. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per section 269K(1). Additionally, the CEO must ensure that the TCO does not adversely affect the rights of any person as at the date of registration of the order and does not impose any new liabilities on any person, as outlined in section 269S(1).
There are no specific offences, penalties, or civil/criminal consequences outlined in this legislation for breaches related to the issuance or the effects of a TCO. However, the process for applying for a TCO and the criteria for approval are strictly defined, and failure to meet these criteria could result in the application being rejected by the CEO. The legislation ensures that the TCO does not disadvantage any person or impose liabilities on anyone for actions taken before the registration date of the TCO.