EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1029022
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.
Hastings Diesel Injection Service applied for a TCO in respect of certain common rail diesel fuel injector test benches on 29 June 2010.
Instrument
TCO No 1029022 was made on 20 September 2010. It declares that those certain common rail diesel fuel injector test benches 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. 1029022 is taken to have come into force on 29 June 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 Tariff Concession Instrument No. 1029022, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods that are not produced domestically. This instrument was introduced to ensure that businesses importing these goods can benefit from reduced customs duty rates, thereby promoting fair competition and economic efficiency. The instrument was developed by the Chief Executive Officer of Customs, who, upon satisfying the core criteria outlined in the Act, granted a tariff concession order (TCO) to Hastings Diesel Injection Service for their common rail diesel fuel injector test benches. This concession aims to provide relief to businesses that rely on importing these specific goods, facilitating their operations without imposing additional costs or disadvantages to any other stakeholders. The process included public consultation as mandated by the Act, though no submissions were received, indicating broad acceptance of the concession.
Scope and Application
The Customs Act 1901, under which Tariff Concession Orders (TCOs) are issued, pertains to the application of reduced customs duty rates on specified goods. Specifically, TCOs are applicable to goods for which an application has been made and approved by the Chief Executive Officer of Customs, provided that no substitutable goods are produced in Australia in the ordinary course of business. This means that the Act applies to any person or entity seeking to import goods that are eligible for tariff concessions, thereby reducing their customs duty obligations. The geographic reach of the Act is national, as it applies across Australia in accordance with the Commonwealth's legislative authority. The Act does not apply to goods specified in section 269SJ, which cannot be subject to a TCO. The application of the Act can be extended or modified through subordinate instruments, as indicated in section 269S(1), which states that a TCO comes into force on the day the application for the TCO was lodged. This means the Act's application is not limited to the primary legislation but can be further defined through subsequent orders or regulations.
Key Provisions
The primary sections of Tariff Concession Instrument No. 1029022, which pertains to the Customs Act 1901, establish the criteria and process for the Chief Executive Officer of Customs (CEO) to grant a Tariff Concession Order (TCO) (sections 269C, 269D, 269E, 269F, and 269P). Section 269F allows an individual or entity to apply for a TCO concerning specific goods. If the CEO determines that the application does not relate to goods specified in section 269SJ, which lists ineligible goods, the CEO must assess whether the application meets the core criteria set out in section 269C. This entails verifying that no substitutable goods, as defined in section 269D, were produced in Australia on the day the application was lodged. If these criteria are met, the CEO must issue a written TCO, as stipulated in section 269P(3).
The obligations imposed by the Act on the parties and entities it governs include the requirement for the CEO to thoroughly assess TCO applications against the core criteria and to consult with relevant stakeholders, as outlined in section 269K(1). The CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be granted. In the case of TCO No. 1029022, no submissions were received. Additionally, the Act mandates that the rights of the Commonwealth and third parties are not adversely affected by the TCO, ensuring that the rights of importers are beneficially impacted and that no new liabilities are imposed prior to the TCO's effective date.
Breaches of the provisions within the Customs Act 1901, including the misuse of TCOs or failure to comply with the statutory obligations, may result in civil or criminal penalties. The specific consequences and penalties for breaches depend on the nature and severity of the violation. Under the Customs Act, penalties can include fines and imprisonment for criminal offences, while civil penalties may involve monetary fines. For example, section 269M of the Act provides for penalties for fraudulent claims or misrepresentations in TCO applications, with maximum penalties specified in the relevant sections of the Act.
The Tariff Concession Instrument No. 1029022, which pertains to the Customs Act 1901, outlines the process and criteria for the CEO to grant a TCO, ensuring that the rights of importers are protected and that no new liabilities are imposed prior to the effective date of the TCO. The CEO must assess TCO applications against the core criteria, consult with stakeholders, and publish notices in the Gazette. Failure to comply with the statutory obligations or misuse of TCOs may result in civil or criminal penalties, including fines and imprisonment, as stipulated within the Customs Act.