EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1055442
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.
Manitowoc Crane Group Australia Pty Ltd applied for a TCO in respect of certain mobile slewing cranes on 20 December 2010.
Instrument
TCO No 1055442 was made on 16 March 2011. It declares that those certain mobile slewing cranes 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. 1055442 is taken to have come into force on 20 December 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 Parliament of Australia, provides a framework for the administration of customs duties, including provisions for tariff concession orders (TCOs) under Part XVA. The Act was introduced to address the need for a mechanism to provide tariff concessions on certain imported goods under specific conditions. The problem it addresses is the potential for increased costs and barriers to trade due to high customs duties on goods where no suitable Australian-made alternatives exist. Tariff Concession Instrument No. 1055442, issued under this Act, was created to respond to an application from Manitowoc Crane Group Australia Pty Ltd for a tariff concession on certain mobile slewing cranes. The policy objective of this instrument is to facilitate trade by reducing the customs duty on these goods, thereby making them more competitive and accessible in the Australian market. The instrument became effective on the date of the application, 20 December 2010, and no submissions opposing the concession were received.
Scope and Application
The Customs Act 1901 provides a framework for the application of tariff concession orders (TCOs) to certain imported goods, allowing for a lower rate of customs duty to be applied. Specifically, under the Act, a person may apply to the Chief Executive Officer of Customs for a TCO in respect of goods if certain criteria are met. The application process involves determining whether the goods are not substitutable by goods produced in Australia in the ordinary course of business. Once the application meets the core criteria, the CEO must issue a written order, which is effective from the date the application was lodged. TCO No. 1055442, issued in 2011, applied to certain mobile slewing cranes, resulting in a reduction of the duty rate from the general rate of 5% to free. The TCO does not affect any existing rights or impose new liabilities on persons other than the Commonwealth, and it may entitle importers to a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1055442 are found in sections 269C, 269P, and 269S of the Customs Act 1901 (the Act). Section 269C sets out the core criteria that an application for a Tariff Concession Order (TCO) must meet, while section 269P outlines the circumstances under which the Chief Executive Officer of Customs (CEO) must make a TCO if the application is satisfactory. Section 269S specifies the effective date of a TCO. This particular TCO, No. 1055442, applies to certain mobile slewing cranes and was made effective from 20 December 2010, the date the application was lodged. The TCO was issued on 16 March 2011 and it declares that the cranes are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations and requirements on both the applicant and the CEO in the process of granting a TCO. The applicant, in this case Manitowoc Crane Group Australia Pty Ltd, must ensure their application for a TCO is valid and meets the core criteria outlined in section 269C of the Act. The CEO must then evaluate the application against these criteria and, if satisfied, issue a written order in the form of a TCO. Additionally, the CEO is required by section 269K(1) of the Act to publish a notice in the Gazette inviting any interested parties to submit their views on the application. This was done for TCO No. 1055442, but no submissions were received.
In terms of legal consequences, the Customs Act 1901 provides for penalties in case of non-compliance with the Act's provisions. While the explanatory statement does not explicitly mention penalties for breaches related to TCOs, general penalties under the Act can include fines and imprisonment for offences such as fraudulent or misleading conduct in relation to customs matters. For example, under section 239 of the Act, a person found guilty of an offence can face a penalty of up to 10,000 penalty units or imprisonment for up to 10 years, or both, for serious offences. Lesser offences may attract lower penalties. The precise penalties would depend on the nature and severity of the breach.
In conclusion, Tariff Concession Instrument No. 1055442 provides significant tariff relief for certain mobile slewing cranes by reducing the duty rate from 5% to free. The Act outlines a clear process for applying for and granting TCOs, with specific obligations for both applicants and the CEO. Although the explanatory statement does not detail specific penalties for breaches related to TCOs, the broader Customs Act 1901 includes provisions for penalties that could apply in the case of non-compliance.