EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940179
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 lubrication systems on 23 October 2009.
Instrument
TCO No 0940179 was made on 15 January 2010. It declares that those certain stacker and reclaimer lubrication systems 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. 0940179 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 Tariff Concession Instrument No. 0940179, enacted in 2010 under the Customs Act 1901, was introduced to provide a concessional rate of customs duty for specific stacker and reclaimer lubrication systems. This instrument was a response to an application by Cdap Consulting Pty Ltd, aiming to address the need for tariff concessions on goods that are not produced in Australia and have no substitutable alternatives domestically. The instrument was developed to ensure that such goods, when imported, do not incur the higher general duty rates, thereby encouraging trade and potentially reducing costs for importers. The Customs Act 1901 provides the framework within which these tariff concessions can be applied, with the Chief Executive Officer of Customs having the authority to make such orders. The policy objective of this instrument is to facilitate the importation of specific industrial goods by reducing their duty rates, provided they meet the criteria for tariff concessions as outlined in the Act.
Scope and Application
The Tariff Concession Instrument No. 0940179, made under the Customs Act 1901, applies to goods specified in the instrument, which in this case are certain stacker and reclaimer lubrication systems. The Act applies to any person or entity seeking a tariff concession order (TCO) for specified goods, ensuring that such goods are eligible for a lower rate of customs duty. The scope of the legislation is national, as it pertains to the Commonwealth of Australia and operates under the provisions of the Customs Act 1901. The application of this instrument is limited to goods that are not substitutable and not produced in Australia, as outlined in section 269C of the Act. The TCO does not disadvantage any person or impose liabilities on any person other than the Commonwealth, and it does not affect the rights of any person as at the date of registration. The application of the TCO is further governed by subordinate instruments, such as the Customs Tariff Act 1995 and the Customs Regulations 1996, which provide additional details on the tariff and the process for duty refunds for importers.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0940179 pertain to the process of applying for, receiving, and the effects of a Tariff Concession Order (TCO) under the Customs Act 1901. Specifically, Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, while Section 269C outlines the core criteria that must be met for such an application to be approved. This includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged, as defined in Section 269D and Section 269E. If the CEO is satisfied that the application meets these criteria, a written TCO is issued under Section 269P(3), effectively granting a lower rate of customs duty on the specified goods.
The Act imposes several obligations on the parties involved. Firstly, applicants must ensure their applications meet the core criteria specified in the Act, including demonstrating that no substitutable goods are produced in Australia on the day of application. The CEO, on the other hand, has the responsibility to review the application and decide whether it meets the criteria for a TCO. Once a TCO is issued, the CEO must also publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. Additionally, the Act mandates that the CEO consults with relevant stakeholders as soon as practicable after accepting the application as valid, as per Section 269K(1).
Failure to comply with the provisions of the Customs Act 1901, particularly in the context of submitting false information or misrepresenting facts in a TCO application, can result in significant consequences. While the Explanatory Statement does not explicitly detail penalties for breaches, the Customs Act generally includes provisions for both civil and criminal penalties for non-compliance. These penalties can include fines and, in severe cases, imprisonment. The exact penalties would depend on the specific nature and severity of the breach, but they are intended to enforce compliance and maintain the integrity of the customs duty system.
The TCO No. 0940179, issued on 15 January 2010, specifically pertains to certain stacker and reclaimer lubrication systems and declares that these goods are subject to a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. This concession came into effect on 23 October 2009, the date the application was lodged. Importantly, the TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any new liabilities on anyone. Importers of these goods are eligible to apply for a refund of duty on goods imported since the TCO came into force, as stipulated under paragraph 126(1)(r) of the Regulations. This ensures that the rights of importers are beneficially affected without imposing any disadvantage or liabilities.