EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0945211
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 applied for a TCO in respect of certain stacker and reclaimer parts on 27 November 2009.
Instrument
TCO No 0945211 was made on 26 February 2010. It declares that those certain stacker and reclaimer 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. 0945211 is taken to have come into force on 27 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, provides a framework for the imposition of customs duties on imported goods, among other things. One of its key provisions is the ability for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) under section 269F, which allows for reduced customs duties on specified goods. This mechanism was introduced to address the need for tariff concessions where no substitutable goods are produced in Australia, as outlined in section 269C. The policy objective is to encourage the importation of goods that are not locally produced, thereby supporting industries that rely on imported components or materials. The Tariff Concession Instrument No. 0945211, issued on 26 February 2010, is an example of this process, providing a tariff concession on certain stacker and reclaimer parts, reducing the duty rate from 5% to free. This order was made after no submissions were received in response to a public notice published in the Gazette, indicating no objections to the concession.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods and grant them a lower rate of customs duty than what is generally prescribed. The application process involves a person submitting a request to the CEO for a TCO if the goods in question are not specified as ineligible under section 269SJ. If the CEO determines that the application is valid and meets the criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia, a TCO is issued. The scope of this legislation encompasses entities or individuals seeking duty concessions for imported goods that are not domestically produced in a substitutable form. The Act operates on a national level within Australia and its application extends to all states and territories under the Commonwealth’s jurisdiction. There are no exclusions explicitly stated in the explanatory statement; however, the goods that cannot be subject to a TCO are detailed in section 269SJ. Additionally, the Act can be extended or restricted through subordinate instruments, which might include regulations or further guidelines issued by the relevant authorities.
Key Provisions
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) (s 269C). A TCO can be applied for by any person and, if certain criteria are met, results in a lower rate of customs duty being applied to the specified goods (s 269F). The key operative sections are sections 269C and 269F, which outline the process for applying for a TCO and the core criteria that must be satisfied for the Chief Executive Officer of Customs (CEO) to approve the application. For example, section 269C requires that no substitutable goods were produced in Australia on the day the application was lodged (s 269C).
Under the Customs Act 1901, the CEO has the obligation to assess any TCO application against the core criteria to determine if it meets the conditions set out in section 269C. If the application satisfies these criteria, the CEO is required to make a written order declaring that the goods in question are subject to a specific rate of duty as outlined in the Customs Tariff Act 1995 (s 269P(3)). Furthermore, the CEO must publish a notice in the Gazette inviting any interested party to submit objections if they believe the TCO should not proceed (s 269K(1)). In the case of TCO No. 0945211, the CEO received no submissions opposing the concession.
In terms of potential breaches and penalties, the Act does not specify particular offences or penalties related to the application or implementation of TCOs. However, if a TCO is found to have been incorrectly applied or if there is fraudulent behaviour in the application process, this could potentially lead to legal action under other provisions of the Customs Act 1901. For instance, knowingly providing false information in an application could attract penalties for misleading or deceptive conduct under section 1041H of the Corporations Act 2001. The specific penalties for such offences can vary, but they can include substantial fines and, in some cases, imprisonment.
The Customs Act 1901, through its TCO provisions, aims to facilitate the import of certain goods by reducing their duty rates, provided the goods are not substitutable by Australian-made products. The Act sets out a clear process for application, assessment, and publication, ensuring transparency and the opportunity for public input. While the Act does not explicitly detail penalties for incorrect TCO applications, broader legal frameworks provide mechanisms for addressing breaches.