EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0941083
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 bucket wheel stacker and reclaimer machine hydraulic drives on 30 October 2009.
Instrument
TCO No 0941083 was made on 15 January 2010. It declares that those certain bucket wheel stacker and reclaimer machine hydraulic drives 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. 0941083 is taken to have come into force on 30 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, establishes a framework for the application of customs duties on imported goods. To address the need for flexibility and economic efficiency in the imposition of these duties, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can reduce the customs duty on specific goods under certain conditions. The problem this legislation aims to address is the potential economic disadvantage faced by Australian importers who might be unable to compete with locally produced goods in certain sectors. By allowing for tariff concessions, the Act seeks to foster a more competitive and fair trading environment. Policy objectives include supporting industry competitiveness and economic growth through reduced costs for imported goods that have no locally produced alternatives.
Scope and Application
The Tariff Concession Instrument No. 0941083 under the Customs Act 1901 applies to the specific category of goods known as bucket wheel stacker and reclaimer machine hydraulic drives. The instrument was issued following an application by Cdap Consulting Pty Ltd, and it pertains to entities or individuals involved in the importation of these goods. The primary objective of this legislation is to provide a concession in customs duty rates for these goods, with the general rate of duty reduced to free of charge as opposed to the usual 5%. This Act operates on a national level, encompassing the entire Commonwealth of Australia. There are no exclusions or exemptions outlined in the explanatory statement, and the application of this concession does not extend to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order. The scope of this instrument may be further defined or extended through subordinate instruments as deemed necessary by the Chief Executive Officer of Customs.
Key Provisions
The key provisions of this legislation, specifically Tariff Concession Instrument No. 0941083 under the Customs Act 1901, centre around the facilitation of tariff concessions for certain goods (section 269F). This legislative instrument declares that the particular bucket wheel stacker and reclaimer machine hydraulic drives are subject to a tariff concession, thereby reducing their duty rate from the general 5% to free. The instrument was issued following an application by Cdap Consulting Pty Ltd on 30 October 2009, and it came into force on the same day (subsection 269S(1)). The CEO of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria stipulated in section 269C.
Under this Act, various obligations are placed upon the CEO of Customs. Firstly, upon receiving an application for a tariff concession order (TCO), the CEO must determine whether the application meets the core criteria (section 269C). If satisfied, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. If the application meets the core criteria, the CEO must then make a written TCO declaring that the specified goods are subject to a prescribed tariff concession (subsection 269P(3)).
The Act also delineates consequences for non-compliance. Although the explanatory statement does not explicitly mention any offences, penalties, or consequences for breach, the framework suggests that failure to adhere to the conditions set forth for granting a TCO could lead to invalidating the concession, thereby imposing the general duty rate on the goods in question. Additionally, if a TCO is granted erroneously, there could be retrospective financial implications for the Commonwealth as duty refunds may need to be processed for goods imported before the TCO's effective date (paragraph 126(1)(r) of the Regulations). The instrument ensures that the rights of persons other than the Commonwealth are not adversely affected by the concession (subsection 269S(1)).