EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012992
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 Machinery (Australia) Pty Ltd applied for a TCO in respect of certain hydraulic excavator external gear pumps on 15 March 2010.
Instrument
TCO No 1012992 was made on 04 June 2010. It declares that those certain hydraulic excavator external gear pumps 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. 1012992 is taken to have come into force on 15 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 Tariff Concession Instrument No. 1012992, enacted under the Customs Act 1901, addresses the problem of ensuring that Australian businesses are not disadvantaged when importing goods for which there are no Australian alternatives. This Instrument was introduced to provide a mechanism through which businesses can apply for tariff concessions on certain goods, allowing them to import these goods at a reduced customs duty rate. The instrument was developed by the Chief Executive Officer of Customs, who has the authority under section 269F of the Act to make such orders. The primary policy objective is to support Australian businesses by reducing the cost of importing necessary goods where local production is not feasible, thereby promoting economic efficiency and competitiveness.
The Instrument was implemented following an application by Hitachi Construction Machinery (Australia) Pty Ltd for a tariff concession on certain hydraulic excavator external gear pumps, where the CEO determined that no substitutable goods were produced in Australia. Consequently, the Instrument declares that these specific goods are subject to a zero rate of customs duty, which contrasts with the general rate of 5% applicable to such goods. This concession is effective from the date the application was lodged, 15 March 2010, and it does not adversely affect any existing rights or impose new liabilities on persons other than the Commonwealth. Importers stand to benefit from this measure, as they may apply for a refund of duty paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 1012992 applies to individuals or entities seeking tariff concessions for specified goods under the Customs Act 1901, particularly those who have applied for and met the criteria for a Tariff Concession Order (TCO). The Act applies at the Commonwealth level and specifically relates to the importation of certain hydraulic excavator external gear pumps, which are subject to a concession reducing the customs duty from the general rate of 5% to free. The application of the TCO is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia, and the process includes a requirement for public consultation, although in this instance, no submissions were received. The commencement date for the TCO aligns with the date the application was lodged, ensuring that rights and liabilities are preserved from the effective date of the TCO. The TCO does not affect any existing rights of individuals or entities as of the registration date, and it allows for the refund of duties paid on goods imported since the TCO's effective date.
Key Provisions
The key provisions of Tariff Concession Order No. 1012992 (TCO No. 1012992) under the Customs Act 1901 (the Act) involve the concession of customs duty for certain hydraulic excavator external gear pumps (section 269F). This instrument allows for a lower rate of customs duty, specifically reducing it to free from the general rate of 5% (section 269P(3)). The application for such a concession must meet core criteria, notably that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). If the Chief Executive Officer of Customs (the CEO) is satisfied with the application, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations under TCO No. 1012992 primarily fall on the CEO, who must ensure the application meets the core criteria before making the order. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. The TCO itself is effective from the date the application was lodged, 15 March 2010 (subsection 269S(1)), and it does not affect the rights of any person as at the date of registration, thus not imposing any new liabilities on importers or other parties (subsection 269S(2)). Importers, however, benefit from the ability to apply for a refund of duty on goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations).
In terms of breaches and penalties, the Customs Act 1901 and the Customs Tariff Act 1995 do not specify particular offences or penalties for non-compliance with the provisions of TCO No. 1012992. However, general provisions within the Customs Act 1901 provide for civil and criminal penalties for breaches of customs duties and related offences. These penalties can include fines and imprisonment, depending on the severity and nature of the breach. The exact penalties would be determined by the relevant courts, taking into account the specific circumstances of each case.