EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008466
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.
Hitachi Construction Material Australia applied for a TCO in respect of certain hydraulic excavator pump transmissions on 17 February 2010.
Instrument
TCO No 1008466 was made on 07 May 2010. It declares that those certain hydraulic excavator pump transmissions 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. 1008466 is taken to have come into force on 17 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. 1008466, enacted in 2010 under the Customs Act 1901, aims to facilitate reduced customs duty on specific goods by allowing tariff concession orders to be made by the Chief Executive Officer of Customs. This instrument was introduced to address the need for streamlined processes in granting tariff concessions to ensure that businesses can operate more efficiently by reducing the duty on imported goods that do not have domestic substitutes. The instrument follows the legislative framework established by the Customs Act 1901, which allows for tariff concessions when certain criteria are met, specifically when no substitutable goods are produced in Australia. The instrument was enacted by the Parliament of Australia, aiming to support economic efficiency by reducing the cost of imported goods for businesses, thereby potentially enhancing competitiveness and consumer benefits.
Scope and Application
The Tariff Concession Instrument No. 1008466, which was made under Part XVA of the Customs Act 1901, applies specifically to the goods in question, namely certain hydraulic excavator pump transmissions, and to the entities that import or deal with these goods. The instrument was enacted to provide tariff concessions to the applicant, Hitachi Construction Material Australia, by reducing the customs duty on these goods from the general rate of 5% to free. This concession is effective from the date the application was lodged, which was 17 February 2010. The instrument does not apply to any other goods or entities not specified within its terms. The scope of the instrument is limited to the reduction of customs duty for the specified goods and does not extend to any other types of taxes or duties. The instrument is subject to the conditions stipulated in the Customs Act 1901 and its application is restricted to the goods that are not substitutable by locally produced alternatives. The instrument does not affect any pre-existing rights or liabilities of entities other than the Commonwealth.
Key Provisions
The key operative sections of this legislation include sections 269C, 269B, 269D, 269E, and 269P, which establish the criteria for Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269C requires the Chief Executive Officer of Customs (CEO) to determine whether an application for a TCO meets the core criteria, which includes assessing whether substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (sections 269B and 269D). If the CEO determines that the application meets the criteria, they must make a written order declaring that the goods in question are subject to a TCO (section 269P(3)). This particular TCO No. 1008466, made on 7 May 2010, applies to certain hydraulic excavator pump transmissions, granting them a duty-free status as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. For the CEO, the primary obligation is to review TCO applications and ensure they meet the core criteria as outlined in section 269C. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO. The CEO is also required to assess whether the application affects any person's rights adversely or imposes new liabilities, although section 269S(1) specifies that the TCO does not affect rights or impose liabilities for actions taken before the TCO registration date. For applicants like Hitachi Construction Material Australia, the obligation is to submit a well-founded application supported by evidence that the goods in question are not substitutable by Australian-produced goods.
The Customs Act 1901 does not explicitly state specific offences or penalties for breaches related to TCO applications within the explanatory statement provided. However, general provisions within the Act and associated regulations likely apply to ensure compliance with the legislative requirements. Violations of customs regulations, including the improper application or misuse of TCOs, could potentially lead to civil or criminal penalties as outlined in the broader customs legislation. The maximum penalties would depend on the nature and severity of the breach, potentially including fines or imprisonment as per the general customs enforcement provisions.