EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1010349
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.
Terex Mining Australia Pty Ltd applied for a TCO in respect of certain travel gear excavator shafts on 26 February 2010.
Instrument
TCO No 1010349 was made on 21 May 2010. It declares that those certain travel gear excavator shafts 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. 1010349 is taken to have come into force on 26 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 Commonwealth Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders, introduced to address the need for tariff concessions on specific goods where no substitutable Australian-made alternatives exist, allow for lower customs duty rates. The explanatory statement for Tariff Concession Instrument No. 1010349, issued under this Act, illustrates the process by which such concessions are granted. Specifically, Terex Mining Australia Pty Ltd applied for and was granted a TCO for certain travel gear excavator shafts, resulting in a duty reduction from 5% to free. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO. The instrument was published in the Gazette with no objections received, and it came into effect on the date of the application, 26 February 2010. The policy objective of this legislation is to facilitate the importation of goods that are not domestically produced, thereby potentially lowering costs for businesses and consumers.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, who has the authority to apply lower rates of customs duty to specific goods. The application process for a TCO is governed by section 269F, which stipulates that a person may apply for a concession provided the goods in question do not fall under the exclusions set out in section 269SJ. If the application meets the core criteria outlined in sections 269C, 269B, and 269D, the CEO must issue a TCO. This legislative framework applies nationally, affecting all entities involved in the importation of the specified goods, including businesses and importers. The TCO is retroactive to the date the application was lodged, as per section 269S(1), meaning that any goods imported from this date forward benefit from the lower duty rate. Notably, the TCO does not disadvantage any existing rights of non-Commonwealth persons or impose liabilities for actions taken prior to the concession's registration. The scope of the TCO can be further refined through subordinate instruments, allowing for adjustments and expansions based on changing economic conditions or trade policies.
Key Provisions
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) under section 269F, whereby an applicant can seek a concession on customs duty for certain goods. The Chief Executive Officer of Customs (CEO) is responsible for deciding whether an application for a TCO meets the core criteria as outlined in sections 269C, 269D, and 269E. If the CEO determines that the application is valid and meets the core criteria, a written TCO is issued, as specified in subsection 269P(3). This order effectively applies a lower rate of customs duty or, in some cases, a free rate, to the goods specified in the TCO.
The obligations imposed by the Act on parties, such as applicants for TCOs, include ensuring their applications are valid and meet the criteria for core consideration, as outlined in section 269C. The CEO has the obligation to review the application and make a decision within the parameters of the Act. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this case. The Act also ensures that the rights of non-Commonwealth persons are protected, and any liabilities are not imposed on them for actions taken before the TCO's registration date.
The Act does not specify any criminal or civil offences directly related to the TCO process. However, non-compliance with the terms of the TCO or misrepresentation in the application process could potentially lead to legal consequences under other relevant sections of the Customs Act 1901 or related legislation. The penalties for such breaches would depend on the specific nature of the non-compliance and could include fines or other legal actions as prescribed by the Act. The Act ensures that the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.