EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1022718
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.
PACCAR Australia Pty Ltd applied for a TCO in respect of certain pneumatic winches on 20 May 2010.
Instrument
TCO No 1022718 was made on 17 August 2010. It declares that those certain pneumatic winches 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. 1022718 is taken to have come into force on 20 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, outlines a framework for the application of customs duty on imported goods. This Act was designed to regulate the import and export of goods, ensuring appropriate taxation and control. The problem or gap it addressed was the need for a systematic way to manage the application of customs duty, particularly concerning the concession of duty on specific goods under certain conditions. One of the mechanisms introduced by the Act is the Tariff Concession Order (TCO), which allows for reduced or waived customs duty on specific goods under certain criteria. This legislative instrument facilitates trade by reducing the financial burden on importers for particular goods, thus encouraging trade and economic growth. The explanatory statement for Tariff Concession Instrument No. 1022718 specifies that this TCO was introduced to provide a tariff concession for certain pneumatic winches, allowing for the importation of these goods at a reduced duty rate, thereby benefiting the rights of importers and facilitating the availability of these goods in the Australian market.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), designed to reduce customs duties on specific goods. This legislative provision applies to any person or entity seeking to import goods that meet the criteria for a TCO, thereby benefiting from a lower rate of customs duty compared to the general tariff. The geographic and jurisdictional reach of this Act is national, impacting all imports into Australia. The Act specifies that certain goods, as outlined in section 269SJ, are ineligible for a TCO, such as those that pose a risk to health, safety, or the environment. The process for a TCO involves an application to the CEO, followed by a determination based on the core criteria stipulated in section 269C, ensuring that no substitutable goods are produced in Australia. This legislation also mandates that the CEO must publish a notice in the Gazette inviting submissions from interested parties before deciding on the TCO, although in the case of TCO No 1022718, no submissions were received. The commencement of a TCO is effective from the date the application is lodged, with the specific TCO No 1022718 coming into force on 20 May 2010, providing relief from duty for certain pneumatic winches, transitioning from a 5% duty to a free rate.
Key Provisions
The Tariff Concession Order (TCO) No. 1022718 under the Customs Act 1901 (the Act) provides that certain pneumatic winches are subject to a concession, specifically granting them a free rate of duty instead of the general rate of 5% (Section 269P(3)). This concession applies when the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods are produced in Australia, as outlined in section 269C of the Act. The TCO aims to reduce the customs duty on these specific goods, making them more affordable for importers.
Entities such as PACCAR Australia Pty Ltd can apply for a TCO if their goods meet the core criteria, which include the absence of substitutable goods produced in Australia (Section 269C). The CEO must assess the application and, if satisfied, issue a written order declaring the goods subject to the concession (Section 269P(3)). This process involves ensuring that the goods in question are not already produced domestically in a manner that could substitute for the imported goods. If the CEO approves the application, the TCO comes into effect from the date of the application (Section 269S(1)).
In addition to approving TCO applications, the CEO has an obligation to publish a notice in the Gazette, inviting any person to lodge a submission if they believe the TCO should not be made (Subsection 269K(1)). In the case of TCO No. 1022718, no submissions were received, indicating that there were no objections to the concession. This transparency step ensures that the process is open and allows for any potential concerns to be addressed before the order is issued.
Failure to comply with the requirements of the Customs Act, including the provisions for TCOs, can result in various penalties. While specific penalties for non-compliance with TCOs are not detailed in the provided text, breaches of the Customs Act generally may lead to civil or criminal consequences. Civil penalties can include fines, while criminal penalties may involve imprisonment, reflecting the seriousness of non-compliance with customs regulations. The maximum penalties are determined by the severity of the offence and the specific provisions of the Act that are breached.