EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0947042
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.
Wilson Transformer Co. Pty Ltd applied for a TCO in respect of certain material handling transporters on 03 December 2009.
Instrument
TCO No 0947042 was made on 26 February 2010. It declares that those certain material handling transporters 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. 0947042 is taken to have come into force on 03 December 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 Commonwealth Parliament, provides a framework for the regulation of imports and exports in Australia, including the imposition of customs duty. One of the mechanisms within this framework is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duty on certain goods. The problem or gap that the TCO scheme addresses is the potential economic disadvantage faced by Australian businesses and consumers when there is a lack of domestic production of goods that are substitutable to imported goods. By applying for and potentially receiving a TCO, businesses can reduce their costs and enhance their competitiveness. The Explanatory Statement for Tariff Concession Instrument No. 0947042 outlines the process and criteria for the issuance of a TCO, including the requirement for the Chief Executive Officer of Customs to be satisfied that no substitutable goods are produced in Australia, thus meeting the core criteria for the concession. This particular instrument was introduced to provide tariff relief on certain material handling transporters, effective from the date of the application, 03 December 2009, with no submissions against the application received.
Scope and Application
The Tariff Concession Instrument No. 0947042 under the Customs Act 1901 applies to persons who wish to import certain goods and have applied for a Tariff Concession Order (TCO) for those goods. Specifically, the instrument addresses applications made by entities such as Wilson Transformer Co. Pty Ltd, which sought concessions for material handling transporters. The Act provides a mechanism whereby the Chief Executive Officer of Customs can grant reduced customs duty rates, provided certain criteria are met. This instrument applies nationally and is part of the broader federal framework governing customs and tariffs within Australia. The Act excludes goods specified in section 269SJ, which cannot be subject to a TCO. The TCO does not disadvantage existing rights of persons other than the Commonwealth and does not impose new liabilities. Instead, it potentially benefits importers by allowing them to apply for refunds of duties paid on the specified goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) concerning Tariff Concession Orders (TCOs) include section 269F, which allows a person to apply for a TCO in respect of goods, and section 269C, which outlines the core criteria that the Chief Executive Officer of Customs (CEO) must satisfy before making a TCO. If the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, and that the goods in question are not prohibited under section 269SJ, a TCO will be made. Section 269P(3) specifies that the CEO must then issue a written order declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting a tariff concession. This process is exemplified by Tariff Concession Instrument No. 0947042, which declares that certain material handling transporters are subject to a 5% duty rate, down from the general rate, due to the absence of substitutable goods produced in Australia.
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that the goods for which the TCO is sought do not fall under the prohibited list in section 269SJ and must provide sufficient evidence that no substitutable goods were produced in Australia. Once an application is deemed valid, the CEO must follow through by publishing a notice in the Gazette inviting any objections or submissions. If no objections are received, the CEO is required to make a TCO if the core criteria are met. The CEO's role also includes verifying that the goods do not have substitutable equivalents produced domestically, as per sections 269D, 269E, and 269F of the Act. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a valid TCO application, providing an opportunity for public input.
Failure to comply with the provisions of the Customs Act 1901 concerning TCOs can lead to various consequences. For instance, any misrepresentation in an application or in the evidence provided could be viewed as an offence under section 269M of the Act, potentially leading to criminal charges. The penalties for such offences are significant and can include fines up to a maximum of $22,000 for individuals and $110,000 for corporations, as stipulated under the Crimes Act 1914. Additionally, any person who knowingly makes a false statement in an application for a TCO may be liable for civil penalties under section 269N of the Act. These provisions underscore the importance of accuracy and integrity in the application process to avoid severe repercussions.