EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014868
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.
PFG Australia Pty Ltd applied for a TCO in respect of certain front end loader arms on 26 March 2010.
Instrument
TCO No 1014868 was made on 18 June 2010. It declares that those certain front end loader arms 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. 1014868 is taken to have come into force on 26 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 Australian Parliament, provides a framework for the regulation of imports and exports, including the imposition of customs duties. To address the economic and competitive needs of certain industries, the Act includes provisions for the creation of Tariff Concession Orders (TCOs), which can reduce customs duty rates for specified goods. TCO No. 1014868, introduced under this scheme, aims to provide tariff relief for certain front end loader arms by applying a zero duty rate instead of the general 5% duty. This was achieved after PFG Australia Pty Ltd applied for the concession, and the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria for a TCO. The TCO was made effective from the date of the application, 26 March 2010, and did not disadvantage any existing rights or impose new liabilities.
Scope and Application
The Customs Act 1901, as amended, allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to lower the rate of customs duty on certain goods, provided the goods do not have substitutable alternatives produced in Australia and meet the core criteria set out in the Act. The Act applies to any person who applies for a TCO in respect of eligible goods, and its jurisdiction extends across the Commonwealth of Australia. The application process involves the CEO determining whether the goods specified in the application meet the criteria, which includes an assessment of whether substitutable goods are produced domestically and the ordinary course of business. The Tariff Concession Instrument No. 1014868 specifically concerns certain front end loader arms, for which PFG Australia Pty Ltd applied for a TCO on 26 March 2010. The TCO was issued on 18 June 2010, and it came into force on the date of application, 26 March 2010, reducing the duty on these goods from 5% to free. The Act ensures that the TCO does not adversely affect any rights or impose liabilities on any person other than the Commonwealth, and it also includes a provision for the CEO to publish notices in the Gazette to invite submissions on TCO applications, although no submissions were received for this particular TCO.
Key Provisions
The primary operative sections of this legislation, namely sections 269F, 269C, and 269P(3) of the Customs Act 1901, establish a framework for the application, assessment, and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. Section 269F allows any person to apply for a TCO concerning specific goods. Section 269C sets out the core criteria that must be met for the application to be considered, primarily focusing on the absence of substitutable goods produced in Australia. If these criteria are met, section 269P(3) mandates that the CEO must issue a TCO. This particular TCO, No. 1014868, was issued on 18 June 2010, declaring that certain front end loader arms are subject to a zero percent duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved, particularly the CEO of Customs, include a thorough assessment of TCO applications against the core criteria specified in section 269C. The CEO must ensure that no substitutable goods are being produced in Australia on the date the application was lodged. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO application. This ensures transparency and allows for any potential objections to be considered before a TCO is issued. In this instance, the CEO did not receive any objections to the application for TCO No. 1014868.
The Act also outlines the consequences of non-compliance with its provisions. While the explanatory statement does not explicitly detail specific offences or penalties, breaches of the Customs Act 1901 can generally lead to civil and criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. The TCO itself, however, is designed to benefit importers by potentially allowing them to apply for a refund of duties paid on the goods from the date the TCO is taken to have come into force, as stipulated under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, ensuring that the rights of existing parties are not adversely affected.