EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1035005
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.
Menard Bachy Pty Ltd applied for a TCO in respect of certain crane hoppers on 30 July 2010.
Instrument
TCO No 1035005 was made on 18 October 2010. It declares that those certain crane hoppers 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. 1035005 is taken to have come into force on 30 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 was amended by the Tariff Concession Instrument No. 1035005, enacted in 2010, to facilitate the introduction of Tariff Concession Orders (TCOs). This instrument addresses the need for a streamlined process whereby the Chief Executive Officer of Customs can reduce or eliminate customs duties on specific imported goods, provided certain criteria are met. The aim is to encourage the import of goods that are not domestically produced, thereby supporting market competition and potentially lowering costs for consumers. This initiative was introduced by the Parliament of Australia with the overarching policy objective of fostering economic efficiency and consumer benefit through the regulation of customs duties. The process involves applications from interested parties, assessment by the CEO, and public consultation, ensuring transparency and stakeholder engagement in the decision-making process.
Scope and Application
The Tariff Concession Instrument No. 1035005 under the Customs Act 1901 applies to the specific goods, in this case certain crane hoppers, as designated by Menard Bachy Pty Ltd. The instrument was made to facilitate the reduction of customs duty on these goods, provided the Chief Executive Officer of Customs is satisfied that no substitutable goods were produced in Australia in the ordinary course of business. The application of this instrument is limited to the goods specified in the application and does not extend to any other goods or categories unless similarly applied for and approved. Geographically, the scope of this Act is national, impacting all entities importing the specified goods into Australia. However, it does not affect the rights of any person, other than the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken before the instrument's registration. The instrument's commencement is effective from the date the application was lodged, in this case, 30 July 2010. The instrument can be extended or modified through subordinate instruments, but the primary Act sets the foundational criteria and application process.
Key Provisions
The primary sections of Tariff Concession Instrument No. 1035005 (TCO No. 1035005) establish the conditions under which a Tariff Concession Order (TCO) can be issued. Section 269F of the Customs Act 1901 allows for the application of a TCO, which applies a lower rate of customs duty to certain goods. To qualify for a TCO, the goods in question must not be specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must then determine if the application meets the core criteria, as outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged.
The obligations under this Act for the Chief Executive Officer of Customs (CEO) include assessing the validity of the TCO application against the criteria set out in section 269C and ensuring that the goods do not fall under the exclusions specified in section 269SJ. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO, as stipulated in subsection 269K(1). If no submissions are received, the CEO proceeds to make the TCO. The TCO, once made, is considered to have come into force on the date the application was lodged, in accordance with subsection 269S(1).
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO could result in various consequences. While the explanatory statement does not detail specific offences or penalties for non-compliance with the TCO itself, breaches of the Customs Act could lead to civil or criminal penalties. For example, knowingly making a false statement or representation in relation to goods under the Customs Act could result in a penalty of up to 10,000 penalty units or imprisonment for five years, or both, as per section 235 of the Act. Importers and exporters must ensure they adhere to the terms of the TCO and the broader legislative framework to avoid such consequences.