EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943510
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.
Kamp Rite Pty Ltd applied for a TCO in respect of certain trailers on 18 November 2009.
Instrument
TCO No 0943510 was made on 05 February 2010. It declares that those certain trailers 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. 0943510 is taken to have come into force on 18 November 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 Australian Parliament, was amended to include Part XVA, which provides a scheme for Tariff Concession Orders (TCOs). This scheme was introduced to address the problem of ensuring that goods imported into Australia are not subject to higher rates of customs duty if suitable domestic alternatives are not produced in the ordinary course of business. The Tariff Concession Instrument No. 0943510, made by the Chief Executive Officer of Customs on 5 February 2010, exemplifies the application of this scheme. In this case, Kamp Rite Pty Ltd successfully applied for a TCO for certain trailers, resulting in a tariff concession from a 5% duty rate to a free rate, as no substitutable goods were being produced in Australia. The policy objective is to encourage the importation of goods by reducing duty rates where appropriate, thereby benefiting importers and potentially stimulating trade and economic activity.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 0943510, applies to the process of applying for and granting Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for specific goods that meet certain criteria. This instrument is particularly relevant to entities such as Kamp Rite Pty Ltd, which applied for a TCO concerning certain trailers. The application and subsequent approval of a TCO are contingent upon the CEO's determination that no substitutable goods are produced in Australia and that the application fulfils the core criteria stipulated in sections 269C and 269F of the Act. The instrument operates under the broader framework of the Customs Act 1901 and the Customs Tariff Act 1995, providing a reduced customs duty rate for goods that are the subject of a TCO. The geographic reach of this legislation is national, affecting all entities importing or dealing with the specified goods within Australia.
Exclusions and exemptions are outlined in section 269SJ of the Act, which specifies goods that cannot be subject to a TCO. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, ensuring that the rights of importers are beneficially affected. This legislative application is further refined and extended through subordinate instruments, ensuring that the scope and specifics of tariff concessions are comprehensively addressed within the legislative framework.
Key Provisions
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through which reduced customs duties can be applied to specific goods (s 269F). Section 269C outlines that a TCO application is considered if, on the day the application is submitted, no goods that can be substituted by Australian-made products are being produced in Australia in the ordinary course of business. To be eligible, the goods must not be specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. If the Chief Executive Officer of Customs (CEO) determines that the application meets the core criteria, they are required to issue a written TCO (s 269P(3)). This written order specifies that the goods in question are subject to a particular rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995. For Kamp Rite Pty Ltd, this meant that certain trailers subject to TCO No 0943510 were to be treated as zero-rated goods, instead of the general 5% duty.
The obligations imposed by the Act on parties such as Kamp Rite Pty Ltd include ensuring their applications for TCOs are lodged in accordance with the legislative requirements. They must provide evidence that no substitutable goods are being produced in Australia and that the goods in question are not listed in section 269SJ. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections to the proposed TCO within a specified timeframe (s 269K(1)). In this instance, no objections were received, allowing the TCO to proceed. The CEO is also required to ensure that the rights of importers are not adversely affected by the TCO, and that the TCO does not impose any new liabilities on individuals or entities.
The Act does not specify particular offences or penalties for breaches related to TCO applications. However, general provisions of the Customs Act 1901 may apply if there is any misleading or false information provided in the application process. Penalties for such breaches can include fines and, in severe cases, imprisonment. The specifics of these penalties would be determined by the relevant sections of the Customs Act 1901 and other applicable laws. The Act ensures that the rights of non-Commonwealth persons are preserved, and that no new liabilities are imposed on them as a result of the TCO. Importers of the affected goods can also apply for refunds of duties paid prior to the effective date of the TCO, as per the Customs (Tariff) Regulations 1999 (s 126(1)(r)).