EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1011179
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.
Port Hedland Port Authority applied for a TCO in respect of certain robotic mooring system parts on 03 March 2010.
Instrument
TCO No 1011179 was made on 28 May 2010. It declares that those certain ship mooring system 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. 1011179 is taken to have come into force on 03 March 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 Parliament of Australia, establishes a framework for managing customs duties, including the mechanism for Tariff Concession Orders (TCOs). These orders, introduced to address the problem of excessive customs duties on goods for which no suitable Australian-made alternatives exist, allow the Chief Executive Officer of Customs to reduce or eliminate customs duty on specified imported goods, provided they meet certain criteria. This initiative aims to encourage trade and investment by making imported goods more competitively priced relative to locally produced alternatives. Tariff Concession Instrument No. 1011179, issued on 28 May 2010, is an example of such an order, reducing the duty on certain robotic mooring system parts to zero. The process for granting these concessions includes a mandatory public consultation period, although in this instance, no objections were received. The concession applies retroactively to the date the application was lodged, ensuring that importers can claim duty refunds for relevant imports.
Scope and Application
The Tariff Concession Instrument No. 1011179, as outlined in the Customs Act 1901, applies to individuals or entities seeking tariff concessions for specific goods entering Australia. This instrument specifically relates to the application made by Port Hedland Port Authority for certain robotic mooring system parts, which were declared as goods subject to a tariff concession order (TCO). The TCO was enacted under the authority of the Chief Executive Officer of Customs, provided that no substitutable goods were produced in Australia, fulfilling the core criteria set out in the Act. The instrument grants a tariff concession, effectively reducing the customs duty on these goods from a general rate of 5% to free. The scope of this legislation extends to the national level, applying across Australia, and does not impose any liabilities on any person other than the Commonwealth. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring that no existing rights are disadvantaged or new liabilities imposed for actions taken prior to the registration date. The rights of importers are beneficially affected, as they may apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Order (TCO) No. 1011179, issued under section 269F of the Customs Act 1901, applies to specific robotic mooring system parts. This order allows these goods to benefit from a tariff concession, which means that they are subject to a rate of duty of free, as opposed to the general rate of duty of 5% (section 269P(3)). The concession is contingent upon the Chief Executive Officer (CEO) of Customs being satisfied that no substitutable goods are produced in Australia on the date the application was lodged, in accordance with section 269C.
Entities or individuals involved in the importation of these goods must comply with the terms set out in the TCO. They must ensure that the goods are accurately classified under the conditions specified in the order. Importers, in particular, have the obligation to apply for a refund of duty on goods imported since the TCO is deemed to have come into force, which is the date the application was lodged (subsection 269S(1)). Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties regarding the application, although in this instance, no submissions were received (subsection 269K(1)).
Failure to comply with the requirements of the TCO may lead to civil or criminal consequences. Although the explanatory statement does not explicitly outline the specific offences or penalties, it is reasonable to infer that breaches of the Customs Act 1901, including non-compliance with TCOs, could result in penalties as stipulated in the Act. Typically, such penalties could include fines or imprisonment, depending on the severity and intent of the breach. The Act's provisions ensure that the rights of individuals or entities other than the Commonwealth are not adversely affected by the TCO, safeguarding them from any liabilities incurred before the order's effective date.