EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940178
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 0940178 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. 0940178 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 was amended to include the Tariff Concession Instrument No. 0940178 in 2010, addressing the need for streamlined processes in applying for tariff concessions on specific goods. This legislative instrument was enacted by the Australian Parliament to facilitate the concession of customs duties on certain imported goods, provided that no substitutable goods were produced in Australia. The policy objective of this instrument is to ensure that the application process for tariff concessions is efficient and transparent, while also safeguarding the interests of importers who might benefit from reduced duty rates on the specified goods. The Tariff Concession Order No. 0940178, which was published in the Gazette and became effective on the date of application, provides a tariff concession for certain stacker and reclaimer machine parts, lowering the duty rate from 5% to free, contingent upon the absence of Australian-produced substitutes.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which apply reduced rates of customs duty on certain goods. The Act applies to any person who can demonstrate that the goods for which they are seeking a concession are not substitutable by any goods produced in Australia in the ordinary course of business. The scope of the Act is national and administered under Commonwealth law, ensuring uniform application across all states and territories. The Act explicitly excludes goods specified in section 269SJ from being subject to a TCO, maintaining a list of non-eligible items. Any TCO can be further defined and extended through subordinate instruments, allowing for the detailed regulation of specific goods and circumstances. The instrument in question, TCO No. 0940178, was made for certain stacker and reclaimer machine parts, providing a zero-rate duty as opposed to the general 5% duty, effective from the date the application was lodged, 23 October 2009.
Key Provisions
The Tariff Concession Instrument No. 0940178, made under section 269P of the Customs Act 1901, specifies that certain stacker and reclaimer machine parts are eligible for a tariff concession, meaning they will attract no customs duty, as opposed to the general rate of 5% (sections 269P(3) and 269S(1)). This applies to goods imported on or after the application date of 23 October 2009. The instrument was formally issued on 15 January 2010. Section 269C of the Act outlines the core criteria for a tariff concession, which include ensuring that no substitutable goods are produced in Australia at the time of the application.
Under this legislation, the Chief Executive Officer of Customs (CEO) is obligated to consider applications for tariff concession orders (TCOs) and decide whether they meet the criteria as stipulated in the Act. Specifically, section 269F mandates that the CEO must make a written TCO if the application for tariff concessions is valid and meets the core criteria. The CEO must also publish a notice in the Gazette, inviting any interested parties to object to the proposed TCO if they believe there are reasons against it (subsection 269K(1)). In this instance, no objections were received.
The Act imposes certain obligations on applicants for TCOs. Applicants must ensure their applications meet the criteria set out in section 269C, particularly that no substitutable goods are produced in Australia at the time of application. Additionally, applicants must provide all necessary information and documentation to substantiate their claims. The CEO is responsible for reviewing applications, deciding whether they meet the criteria, and making written orders if they do.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations may result in penalties. Section 277 of the Act allows for the imposition of fines and other penalties for non-compliance with customs laws. The maximum penalties for offences under the Customs Act can include substantial fines and imprisonment, depending on the severity of the breach. Specifically, section 281 provides for penalties that may include fines up to $22,000 for individuals and $110,000 for corporations, as well as potential imprisonment terms. The specific penalties are determined by the nature and extent of the contravention.