EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014802
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 applied for a TCO in respect of certain dump truck wheel drive rotor assemblies on 25 March 2010.
Instrument
TCO No 1014802 was made on 18 June 2010. It declares that those certain dump truck wheel drive rotor assemblies 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. 1014802 is taken to have come into force on 25 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, provides for the regulation of customs and excise duties, including mechanisms for tariff concessions. One such mechanism is the Tariff Concession Order (TCO), which allows for a lower rate of customs duty on certain goods, provided they meet specific criteria. The problem this legislation addresses is the facilitation of the import of goods that are not domestically produced, thereby encouraging trade and economic activity. The explanatory statement for Tariff Concession Instrument No. 1014802, made under the Customs Act, outlines the process and decision made by the Chief Executive Officer of Customs regarding an application by Terex Mining Australia for a TCO on certain dump truck wheel drive rotor assemblies. The CEO's decision, based on the absence of substitutable goods produced in Australia, led to the issuance of TCO No. 1014802, which granted a duty-free status to these specific goods, effective from the date of application. This legislative instrument aims to streamline the import process for certain goods and promote economic efficiency by reducing customs duties where appropriate.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCOs), facilitates tariff concessions for specific goods, thereby reducing the customs duty payable on them. The Act applies to individuals or entities that apply for a TCO for goods, particularly in cases where no substitutable goods are produced in Australia, as per the core criteria outlined in section 269C. This instrument is instrumental in providing relief to businesses by lowering the duty on certain imported goods, hence promoting trade and economic activities. The Act operates on a national level, administered by the Chief Executive Officer of Customs, and its application is not restricted by state or territory boundaries, though the specific impact on duties is federally governed. TCO No. 1014802, for example, pertains to Terex Mining Australia's application for concessional tariffs on dump truck wheel drive rotor assemblies, which was approved on the condition that no substitutable goods were being produced domestically. The TCO does not retroactively affect the rights or liabilities of parties other than the Commonwealth, ensuring that it only benefits those importing the specified goods from the date the order comes into effect.
Key Provisions
The main sections of the Customs Act 1901 (the Act) pertinent to this Tariff Concession Instrument include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) for specific goods. The CEO must ensure that the application does not concern goods specified in section 269SJ, which are ineligible for TCOs. If the CEO is satisfied that the application meets the core criteria as defined in section 269C, where no substitutable goods are produced in Australia, they must issue a TCO. Section 269P(3) mandates that a written order be made declaring the goods to which the TCO applies.
The Act imposes several obligations on parties involved in the TCO process. The CEO must evaluate the application against the core criteria, ensuring that the goods in question are not substitutable and are not those excluded by section 269SJ. If the CEO determines that the application meets these criteria, they are required to issue a TCO and publish a notice in the Gazette inviting any objections. Terex Mining Australia, the applicant in this case, must provide all necessary information and documentation to support their application. The CEO is also required to consider any submissions received in response to the Gazette notice before making a final decision.
There are no specific offences or penalties outlined in the explanatory statement for breaches of the TCO process, but the general legal framework under the Customs Act and associated regulations may apply. The Act does not impose any liabilities on any person for actions taken before the TCO is registered, ensuring that the rights of importers are protected. Importers may apply for a refund of duty on goods imported since the effective date of the TCO, which benefits them financially. The TCO does not disadvantage any person or impose new liabilities on any party.
The Tariff Concession Instrument No. 1014802, made under the Customs Act, specifically addresses the concession of customs duty for certain dump truck wheel drive rotor assemblies. The CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria. Consequently, the TCO declared that these goods are subject to a duty rate of free, instead of the general rate of 5%. The instrument came into force on the date the application was lodged, 25 March 2010. This legislative action benefits importers by potentially reducing their duty payments and does not impose any new liabilities or disadvantages on any party.