EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1032320
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.
Pacific Materials Handling Scrap Equipment Division Pty Ltd applied for a TCO in respect of certain material handlers on 15 July 2010.
Instrument
TCO No 1032320 was made on 01 November 2010. It declares that those certain material handlers 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. 1032320 is taken to have come into force on 15 July 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 Commonwealth Parliament, establishes a framework for the administration of customs and excise in Australia. In particular, Part XVA of the Act provides for the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 1032320, made under this authority, addresses the specific issue of tariff concessions for certain material handlers. This instrument was introduced to provide tariff relief for goods that do not have substitutable Australian-made alternatives, thereby encouraging the importation of such goods to meet domestic demand and support industries where local production is insufficient. The policy objective is to facilitate the import of these goods by reducing or eliminating customs duty, thus making them more competitively priced and accessible in the Australian market. The instrument ensures that no person other than the Commonwealth is disadvantaged or imposed upon by its provisions, while also providing potential duty refunds to importers under certain conditions.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This Act applies to individuals and entities that seek tariff concessions for specific goods, provided these goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The application process involves satisfying the core criteria as outlined in sections 269C and 269D, which pertain to the production of substitutable goods in Australia. Once the CEO determines that the application meets the core criteria, a TCO is issued, reducing the customs duty on the specified goods. This legislation operates on a Commonwealth level and extends its application through subordinate instruments, ensuring that the scope and implementation of tariff concessions are clearly defined and regulated.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). An applicant can apply for a TCO regarding certain goods, provided that these goods are not listed in section 269SJ, which outlines goods that cannot be subject to a TCO. If the CEO is satisfied that the application is valid and meets the core criteria, they must make a written order (section 269C). In this case, Pacific Materials Handling Scrap Equipment Division Pty Ltd applied for a TCO for certain material handlers on 15 July 2010. After reviewing the application, the CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria. Consequently, a TCO was issued on 1 November 2010, declaring that these material handlers are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free, down from the general rate of 5% (subsection 269P(3)).
The Act imposes certain obligations on the CEO and applicants. Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their reasons against the TCO (subsection 269K(1)). In this instance, no submissions were received. Furthermore, the TCO does not affect the rights of any person, except the Commonwealth, in a manner that disadvantages them or imposes liabilities for actions taken before the TCO's registration (subsection 269S(1)). Importers of the affected goods will have their rights beneficially impacted, as they can apply for a refund of duty on goods imported since the TCO's effective date.
Breach of the provisions in the Customs Act 1901 can lead to various consequences. For example, unauthorised importation or exportation of goods can result in civil or criminal penalties. The maximum penalty for a civil offence under the Customs Act can be substantial, often reflecting the value of the goods involved or the potential revenue loss to the Commonwealth. Criminal penalties can include fines and imprisonment, depending on the severity and intent behind the breach. It is crucial for parties to comply with the Act's requirements to avoid these potential legal repercussions.