EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1022777
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.
Forgacs Engineering Pty Ltd applied for a TCO in respect of certain platform transporters on 21 May 2010.
Instrument
TCO No 1022777 was made on 10 August 2010. It declares that those certain platform transporters 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. 1022777 is taken to have come into force on 21 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods, including the imposition of customs duties. This legislation was introduced to address the need for a structured and systematic approach to customs duties and the regulation of goods crossing Australia's borders. The Tariff Concession Instrument No. 1022777, issued in 2010, is part of this broader framework. It was introduced to provide tariff concessions for certain goods, ensuring that Australian industries can access necessary materials without the burden of prohibitive customs duties. The policy objective behind this instrument, as stated, is to facilitate the import of goods that are not produced in Australia, thereby supporting the domestic industry by preventing local production from being undermined by cheaper imported alternatives. The instrument was developed in response to an application by Forgacs Engineering Pty Ltd for tariff concessions on specific platform transporters, which were granted after it was determined that no substitutable goods were being produced in Australia at the time.
Scope and Application
The Customs Act 1901, through Part XVA, provides a mechanism for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to certain goods. These orders are applicable to goods that meet specific criteria, such as not having substitutable goods produced in Australia in the ordinary course of business. The scope of the Act applies to any person or entity seeking tariff concessions for goods imported into Australia. The geographic reach of this legislation is national, as it operates under the Commonwealth jurisdiction. Notably, the Act excludes certain goods from being subject to TCOs as outlined in section 269SJ of the Customs Act. The application of the Act can be extended or restricted through subordinate instruments such as regulations and orders, although these are not explicitly detailed in the provided explanatory statement. The process for issuing a TCO includes an opportunity for public consultation, although in this specific case, no submissions were received.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1022777 (TCO No 1022777) under the Customs Act 1901 (section 269F) and the Customs Tariff Act 1995 establish the criteria and process for granting tariff concessions on certain goods. Specifically, section 269C of the Act mandates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) then requires the Chief Executive Officer of Customs (CEO) to make a written order declaring the goods to which the concession applies if the core criteria are met. This TCO declares that certain platform transporters are subject to a free rate of duty instead of the general rate of 5%, as specified in item 50 of Schedule 4 to the Tariff.
The Act imposes several obligations on the parties it governs. Firstly, applicants such as Forgacs Engineering Pty Ltd must ensure that their application for a TCO meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. The CEO has the obligation to review the application, determine if the core criteria are met, and if so, issue a written TCO order. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties regarding the application. In this case, the CEO did not receive any submissions.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for the failure to comply with the requirements of a TCO. However, the Act and associated regulations may have provisions for non-compliance that could lead to penalties, such as fines or other sanctions, for breaches of customs or tariff laws. The precise penalties would depend on the specific provisions of the Customs Act 1901 and any relevant regulations, which are not detailed in the explanatory statement.