EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1055951
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.
Haulmax Pty Ltd applied for a TCO in respect of certain off highway rear dump truck torque converters on 23 December 2010.
Instrument
TCO No 1055951 was made on 21 March 2011. It declares that those certain off highway rear dump truck torque converters 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. 1055951 is taken to have come into force on 23 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 was enacted by the Australian Parliament and establishes a framework for the administration of customs and excise duties. The Act includes provisions for the creation of Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on certain goods. This was introduced to address the problem of ensuring that certain goods, particularly those that are not produced domestically, are subject to tariff concessions when imported. The Tariff Concession Instrument No. 1055951 was made under the authority of the Customs Act 1901 by the Chief Executive Officer of Customs, following an application by Haulmax Pty Ltd for a TCO in respect of certain off highway rear dump truck torque converters. The policy objective of the TCO is to reduce the duty on these goods from the general rate of 5% to free, thereby making imported torque converters more competitively priced in the Australian market. The instrument came into force on the date the application was lodged, 23 December 2010, and does not affect the rights of any person in a way that would disadvantage them or impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 1055951 applies to specific goods identified in the application made by Haulmax Pty Ltd for certain off highway rear dump truck torque converters, which are subject to the Customs Act 1901. This Act applies to the Chief Executive Officer of Customs (CEO) who has the authority to make Tariff Concession Orders (TCOs) under Part XVA of the Act. The application for a TCO must meet the core criteria outlined in the Act, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged. This legislation extends to the national jurisdiction under the Commonwealth of Australia. The TCO does not extend to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The scope of the TCO is limited to the specific goods mentioned in the application, and it does not affect the rights or impose liabilities on any person other than the Commonwealth. The TCO was published in the Gazette, inviting submissions, but none were received, leading to the issuance of the TCO on 21 March 2011, effective from 23 December 2010, the date the application was lodged.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 1055951 (referred to as TCO No. 1055951) under the Customs Act 1901 include section 269F, which outlines the process for applying for a Tariff Concession Order (TCO); section 269C, which details the core criteria that an application must meet for the CEO to grant a TCO; and section 269P(3), which stipulates that if the CEO is satisfied the application meets the core criteria, a written TCO must be issued. Section 269SJ defines the goods that cannot be subject to a TCO. TCO No. 1055951 specifically applies to certain off highway rear dump truck torque converters, declaring them to be subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the duty rate being free instead of the general rate of 5%.
The obligations imposed by the Act on the parties involved are primarily directed at the Chief Executive Officer of Customs (CEO), who must assess whether an application for a TCO meets the core criteria set out in section 269C. If the application is deemed valid and meets the criteria, the CEO must issue a written TCO as specified in section 269P(3). Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons to object to the TCO, as outlined in subsection 269K(1). This process ensures that the CEO considers any potential objections before making a final decision.
In terms of potential offences and penalties, the Act does not explicitly detail specific penalties for failing to comply with the obligations under the TCO. However, breaches of the Customs Act 1901 generally may result in criminal or civil penalties. For instance, section 257 of the Act provides for penalties for breaches, which can include fines up to $22,200 or imprisonment for up to five years, or both, for serious offences. For less serious offences, the penalties might include fines up to $2,220 or other civil consequences as determined by the court.
Additionally, any party that fails to comply with the terms of the TCO may face civil consequences, such as being liable for the correct amount of duty on the goods that should have been paid had the TCO not been in effect. The TCO itself does not impose any new liabilities on any person but rather modifies the duty rate for specified goods, as outlined in subsection 269S(1).