EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1005810
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.
Transcrete Australia applied for a TCO in respect of certain concrete pump parts on 02 February 2010.
Instrument
TCO No 1005810 was made on 23 April 2010. It declares that those certain concrete pump 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. 1005810 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the application of customs duties on imported goods. This Act introduced the concept of Tariff Concession Orders (TCOs) to offer relief on certain duties under specific conditions. In this context, the Tariff Concession Instrument No. 1005810 was introduced on 23 April 2010 to address the application by Transcrete Australia for tariff concessions on certain concrete pump parts. The instrument was made to facilitate the importation of these parts duty-free, as no substitutable goods were being produced in Australia at the time of the application. The policy objective is to support Australian importers by reducing the duty on specific goods, thereby encouraging trade and potentially lowering costs for businesses reliant on these imported components. The instrument came into force on the date the application was lodged, 2 February 2010, and does not affect any pre-existing rights or impose new liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 1005810, made under the Customs Act 1901, applies to individuals or entities who seek to import specific goods that qualify for tariff concessions, in this case, certain concrete pump parts. This instrument is part of a broader scheme under which the Chief Executive Officer of Customs may grant tariff concessions via Tariff Concession Orders. The Act applies to these goods by reducing the rate of customs duty to zero, provided that the goods are not substitutable by products manufactured within Australia. The scope of the Act extends to the Commonwealth level and affects the import process for those goods, allowing for a streamlined customs procedure for Transcrete Australia and potentially other importers of similar goods. The Act does not extend to goods specified in section 269SJ of the Customs Act 1901, which outlines those goods ineligible for tariff concessions. Additionally, the Act’s application is not retroactive, ensuring that it does not disadvantage or impose liabilities on any person for actions taken prior to the instrument’s registration.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269K, and 269P, which establish the process for Tariff Concession Orders (TCOs). Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO, while section 269C sets out the core criteria that the CEO must assess to determine if the application should be approved. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from the public if a TCO application is accepted as valid, and section 269P mandates that a TCO be issued if the CEO determines the application meets the core criteria. The legislation also defines terms such as "substitutable goods" and "ordinary course of business" to ensure clarity in the application process.
The obligations imposed by the Act on the parties it governs are primarily on the CEO of Customs. Once an application for a TCO is received, the CEO must assess whether it meets the core criteria outlined in section 269C. If the application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their views on whether the TCO should be granted. The CEO is also required to make a written order (TCO) if the application meets the core criteria. Importers, on the other hand, must ensure their applications are complete and that they meet all the stipulated criteria to benefit from the tariff concession.
Breaches of the requirements set out in the Customs Act 1901 may result in both civil and criminal consequences. Under section 147 of the Act, any person who contravenes a provision of the Act, including the provisions relating to TCOs, is liable to a penalty. The maximum penalty for individuals is $13,200, while for bodies corporate, it is $66,000. In addition to financial penalties, breaches may also lead to legal action being taken against the offending party. It is essential for all parties to comply with the provisions of the Act to avoid these consequences.