EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021919
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.
BMHA Pty Ltd applied for a TCO in respect of certain stacker and or reclaimer parts on 14 May 2010.
Instrument
TCO No 1021919 was made on 26 July 2010. It declares that those certain stacker and or reclaimer 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. 1021919 is taken to have come into force on 14 May 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 customs and excise in Australia. Among other provisions, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) to provide lower rates of customs duty on certain goods. This mechanism was introduced to address the need for tariff adjustments that could foster economic efficiency and competitiveness without imposing undue burdens on Australian businesses or consumers. Specifically, it allows for duty-free imports of goods for which no suitable Australian-made alternatives exist, thereby supporting industries that may struggle to compete with imported products. Tariff Concession Instrument No. 1021919, made under this Act on 26 July 2010, is an example of such an order, providing a duty concession on certain stacker and reclaimer parts, which were deemed to have no substitutable Australian goods, thereby benefiting importers of these specific parts.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply a lower rate of customs duty to specified goods. The Act allows individuals or entities to apply for a TCO under section 269F if certain criteria are met, particularly that the goods in question are not specified in section 269SJ, which excludes certain goods from TCO eligibility. A TCO application is deemed to meet the core criteria if, on the date of application, there are no substitutable goods produced in Australia, as defined by section 269C. For instance, TCO No. 1021919 was issued for certain stacker and reclaimer parts, granting them a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, as no substitutable goods were produced in Australia at the time. The TCO process also mandates that the CEO publish a notice in the Gazette inviting submissions, although no submissions were received for TCO No. 1021919. The TCO's commencement date aligns with the date of application, thereby ensuring that the rights of importers are advantageously affected, allowing them to seek duty refunds for imports since the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1021919 under the Customs Act 1901 are Sections 269C, 269B, 269D, 269E, 269F, and 269P. Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B defines the terms "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be made.
The obligations and requirements imposed by the Act on the parties it governs include the necessity for an applicant, such as BMHA Pty Ltd, to ensure that the goods for which a TCO is sought are not substitutable by goods produced in Australia. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties and to consider these submissions if any are received. Once the CEO is satisfied that the core criteria are met, a TCO must be issued. The CEO's decision must be made in writing and declared in a published order.
The Act also delineates the consequences of non-compliance. While the explanatory statement does not specify offences, penalties, or criminal consequences, it is implied that any misuse of the TCO process or failure to adhere to the statutory requirements could result in legal ramifications. Given the nature of the Act, breaches could potentially lead to civil or administrative penalties, although these are not explicitly stated in the document. The focus of the legislation is on the procedural correctness and the economic benefit of tariff concessions, ensuring that the rights of importers are protected and that no liabilities are imposed on third parties as a result of the TCO.