EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1016722
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.
Stormwater Systems applied for a TCO in respect of certain amphibious dredgers on 12 April 2010.
Instrument
TCO No 1016722 was made on 25 June 2010. It declares that those certain amphibious dredgers 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. 1016722 is taken to have come into force on 12 April 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 for a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This Act was introduced to address the need for a streamlined process to reduce customs duty rates on certain goods, provided that no substitutable goods are produced in Australia. The policy objective is to facilitate trade by lowering the duty on specific imported goods, thereby making them more affordable and competitive within the Australian market. As part of this scheme, Stormwater Systems applied for a TCO for certain amphibious dredgers on 12 April 2010. Following the CEO’s satisfaction that no substitutable goods were produced in Australia, Tariff Concession Order No. 1016722 was made on 25 June 2010, effectively applying a zero duty rate on these goods, down from the general rate of 5%. This order came into effect on the date of the application, 12 April 2010, and does not disadvantage any party other than the Commonwealth by imposing liabilities or affecting pre-existing rights.
Scope and Application
The Tariff Concession Instrument No. 1016722 applies to certain amphibious dredgers, which are specified as goods that will benefit from a lower rate of customs duty under the Customs Act 1901. The instrument was made by the Chief Executive Officer of Customs on 25 June 2010, following an application by Stormwater Systems on 12 April 2010. The instrument declares that the amphibious dredgers are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free rate for these goods. The application process and subsequent instrument issuance adhere to the criteria set out in the Customs Act, specifically section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business. The instrument came into force on 12 April 2010, the date the application was lodged, and does not affect the rights of any person adversely or impose any liabilities on persons other than the Commonwealth in relation to actions taken prior to its registration.
Key Provisions
The main operative sections of the Customs Act 1901, particularly under Part XVA, establish a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs (section 269F). If a person applies for a TCO in respect of goods and the CEO determines that the application is valid and meets the core criteria, a TCO can be issued (section 269C). These core criteria include ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C, 269D, 269E). Specifically, TCO No. 1016722, which applies to certain amphibious dredgers, was issued on 25 June 2010, after the CEO was satisfied that no substitutable goods were produced in Australia (section 269P(3)). This TCO declares that these amphibious dredgers are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must determine whether an application for a TCO meets the core criteria as stipulated by the Act. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit their views on the proposed TCO (subsection 269K(1)). This ensures transparency and allows for any objections to be considered before a TCO is issued. In this case, no objections were received following the publication of the notice (subsection 269K(1)).
The Customs Act 1901 also outlines the consequences of breaching the provisions related to TCOs. While the Act does not explicitly state penalties for breaches, non-compliance with the conditions set forth for issuing a TCO could potentially lead to legal challenges or administrative actions. The Act ensures that the rights of individuals, except for the Commonwealth, are not adversely affected by the issuance of a TCO (subsection 269S(1)). Furthermore, the Act allows for the possibility of duty refunds for importers of goods subject to a TCO, provided they apply within the stipulated timeframe (paragraph 126(1)(r) of the Regulations). It is crucial for all parties to adhere to these provisions to avoid any legal repercussions.
In conclusion, the Customs Act 1901, through Part XVA, provides a structured process for the creation of Tariff Concession Orders, ensuring that the conditions for issuing such orders are met. The CEO of Customs plays a pivotal role in determining the validity of TCO applications and publishing notices to facilitate public consultation. While the Act does not explicitly detail penalties for breaches, non-compliance could result in legal consequences. The rights of individuals, except for the Commonwealth, are protected, and importers have the opportunity to apply for duty refunds under specific conditions.