EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1005753
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.
P.A Construction Equipment applied for a TCO in respect of certain crawler mounted cranes on 02 February 2010.
Instrument
TCO No 1005753 was made on 23 April 2010. It declares that those certain crawler mounted cranes 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. 1005753 is taken to have come into force on 02 February 2010.
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. 1005753, enacted under the Customs Act 1901, addresses the need for lower customs duty rates on specific imported goods where no substitutable domestic production exists. This instrument was introduced to facilitate trade by making certain goods more competitively priced in the Australian market. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) when an application is deemed to meet core criteria, such as the absence of Australian-made substitutable goods. In this case, P.A Construction Equipment applied for a TCO concerning certain crawler mounted cranes, and the instrument was enacted on 23 April 2010, reducing the duty rate from 5% to free. This change came into effect from the date of the application, 2 February 2010, with no retroactive impact on existing rights or liabilities, thereby benefiting importers who can claim refunds for duties paid on the specified goods since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 1005753 under the Customs Act 1901 applies to entities seeking tariff concessions for specific goods, in this case, crawler mounted cranes, by applying for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO). The instrument applies to the particular goods specified in the application and is intended to provide relief from customs duties for these goods, provided no substitutable goods are produced in Australia at the time of application. The scope of this instrument is limited to the goods specified in the application and does not extend to any other goods unless another TCO is applied for and granted. The instrument is effective from the date the application was lodged and has a Commonwealth jurisdictional reach. It does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person. However, the CEO must ensure that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. The TCO does not apply to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The CEO is also required to publish a notice in the Gazette inviting submissions on the application, although in this case, no submissions were received.
Key Provisions
The primary sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 1005753, establish the procedure for issuing Tariff Concession Orders (TCOs) that reduce the rate of customs duty on specified goods. Section 269F outlines the application process for a TCO, whereby an individual or entity may apply to the Chief Executive Officer (CEO) of Customs for a concession. The CEO evaluates the application against the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. If these criteria are met, the CEO must issue a TCO, as stipulated in section 269P(3). This particular TCO, No. 1005753, applies to certain crawler mounted cranes, reducing their duty from 5% to free, as no suitable Australian-produced alternatives were identified.
Entities and individuals subject to this Act must adhere to several obligations when applying for or dealing with TCOs. Firstly, any applicant for a TCO must ensure their application is valid and meets the criteria laid out in section 269C. The CEO is obligated to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be granted, as per subsection 269K(1). Additionally, the CEO must decide whether the application meets the core criteria within a reasonable timeframe. Importers, once the TCO is in effect, have the right to apply for a refund of duty paid on the specified goods since the TCO's effective date, as outlined in paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901, or the terms of a TCO, may result in various penalties and consequences. The Act does not explicitly detail specific penalties for breaches related to TCOs, but general contraventions of the Customs Act may result in substantial penalties. These can include fines and, in serious cases, criminal prosecution. The exact penalties would depend on the nature and severity of the breach, with the potential for both civil and criminal sanctions. It is important for all parties involved to fully understand and comply with the requirements to avoid any legal repercussions.