EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1023856
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.
General Electric International applied for a TCO in respect of certain excavator generators on 28 May 2010.
Instrument
TCO No 1023856 was made on 23 August 2010. It declares that those certain excavator generators 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. 1023856 is taken to have come into force on 28 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, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) as outlined in Part XVA. These orders allow for the application of lower rates of customs duty on certain goods, provided they meet specific criteria. This legislative instrument addresses the need to facilitate trade by reducing the cost of imported goods, thereby encouraging their use and availability in the domestic market. The Tariff Concession Instrument No. 1023856, issued under this Act, was introduced to provide a tariff concession for certain excavator generators, allowing for their importation at a reduced duty rate. This initiative aligns with the policy objective of promoting economic efficiency and trade facilitation by ensuring that importers are not unduly burdened by high customs duties on goods that are not domestically produced.
Scope and Application
The Tariff Concession Instrument No. 1023856, made under the Customs Act 1901, applies specifically to goods that are the subject of a Tariff Concession Order (TCO), which in this instance are certain excavator generators. The instrument was initiated by a valid application from General Electric International, and it applies to the goods identified in the application once the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were produced in Australia in the ordinary course of business. The instrument provides a concession by setting the rate of customs duty on these goods to zero, thereby differing from the general rate of duty which is 5%. The TCO applies nationally across Australia and is governed by the provisions of the Customs Act 1901 and the Customs Tariff Act 1995. The instrument does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration of the TCO, except to the benefit of importers who can apply for a refund of duty on goods imported since the TCO came into force. The TCO came into force on the day the application was lodged, 28 May 2010.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1023856, which is related to the Customs Act 1901, revolve around the issuance of Tariff Concession Orders (TCOs). Section 269F of the Act allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO decides that the application is valid and not for goods listed in section 269SJ, which specifies those that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. This section stipulates 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. Further clarification on terms like 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' can be found in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, they are required by subsection 269P(3) to issue a written order, which is the TCO, specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved, particularly the CEO of Customs, are significant. The CEO must ensure that the application for a TCO is valid and not for goods that cannot be subject to a TCO as per section 269SJ. Once the CEO determines that the application meets the core criteria, they must issue the TCO. The CEO is also mandated to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to submit their views. This is stipulated in subsection 269K(1) of the Act. In this specific case, the CEO did not receive any submissions in response to the published notice. Additionally, the Act ensures that the TCO does not affect the rights of a person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.
Under the Act, several consequences follow from the breach of its provisions. The Act does not specify particular offences related to the issuance of TCOs. However, any failure by the CEO to adhere to the legislative requirements when deciding on a TCO application could potentially lead to legal challenges or administrative consequences. The penalties or consequences for breaches are not explicitly stated within the text of the instrument. In general, breaches of the Customs Act 1901 or related regulations could result in civil or criminal penalties, depending on the nature and severity of the breach. These penalties could include fines or imprisonment, but the exact maximum penalties would be governed by the broader Customs Act and related regulations, not specified in this particular TCO instrument.