EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008533
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.
Fisher Australia applied for a TCO in respect of certain agricultural mowers on 17 February 2010.
Instrument
TCO No 1008533 was made on 14 May 2010. It declares that those certain agricultural mowers 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. 1008533 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 Order No. 1008533, enacted under the Customs Act 1901, was introduced to provide a concession on customs duty for certain agricultural mowers applied for by Fisher Australia on 17 February 2010. The legislation aims to facilitate the importation of these specific goods by reducing the duty rate from the general 5% to free, provided no substitutable goods are produced in Australia. This was in line with section 269C of the Act, which requires the Chief Executive Officer of Customs to ensure that no substitutable goods are produced domestically before granting a Tariff Concession Order. The instrument was made on 14 May 2010 and is effective as of the date the application was lodged, without any adverse effect on existing rights or liabilities of importers or other parties.
The Tariff Concession Instrument No. 1008533 was developed to address the gap in the duty structure for certain imported goods, ensuring that Australian businesses can access necessary equipment at a reduced cost while maintaining compliance with the Customs Act 1901. The enacting body, the Chief Executive Officer of Customs, considered the application and published a notice in the Gazette inviting submissions, though none were received. This process underscores the policy objective of providing tariff relief where appropriate, facilitating trade, and ensuring that Australian businesses can compete effectively in the global market.
Scope and Application
The Customs Act 1901, through the Tariff Concession Orders (TCO) mechanism, applies to any person or entity seeking a reduction in customs duty on imported goods by applying for a TCO from the Chief Executive Officer of Customs. This process is available for goods not listed in section 269SJ of the Act, which specifies goods that cannot be subject to a TCO. The Act requires that a TCO application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged, as per sections 269C and 269F. The application of TCOs is limited to the Commonwealth jurisdiction, but they affect the rights of importers who can apply for a refund of duty on goods imported since the TCO came into force, as outlined in the Customs Tariff Act 1995. The TCO does not disadvantage any person or impose new liabilities for actions taken before the TCO was registered. The scope of the TCO can be extended through subordinate instruments, but the primary legislation does not specify any exclusions beyond those in section 269SJ.
Key Provisions
The main operative sections of the Customs Act 1901, particularly Part XVA, detail the process for making Tariff Concession Orders (TCOs) and applying them to specific goods. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the application is not for goods specified in section 269SJ, which are ineligible for TCOs, the CEO must assess if the application meets the core criteria outlined in section 269C. This assessment hinges on whether there are no substitutable goods produced in Australia on the day the application was lodged, as defined by section 269D and 269E. If the core criteria are satisfied, the CEO is required under section 269P(3) to issue a TCO, specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are straightforward. The applicant must ensure their application complies with the eligibility criteria, including the absence of substitutable goods in Australia. The CEO is mandated to review applications promptly, publish notices in the Gazette inviting submissions on proposed TCOs, and make a decision based on the application and any received submissions. Additionally, under section 269K(1), the CEO must ensure the rights of third parties are not adversely affected by the issuance of a TCO, and they must consider any submissions received.
Failure to comply with the provisions of the Customs Act 1901 can result in legal consequences. Although specific offences and penalties are not outlined in the explanatory statement, the Act generally allows for penalties under section 269S, which can include fines and other civil or criminal sanctions for non-compliance. For instance, knowingly making false statements in an application could lead to penalties under section 274, which can include fines of up to $22,200 for individuals and up to $111,000 for corporations, depending on the severity and intent of the offence. These penalties underscore the importance of adhering to the statutory requirements set forth in the Act.