EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1055953
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 parts on 23 December 2010.
Instrument
TCO No 1055953 was made on 21 March 2011. It declares that those certain off highway rear dump truck parts 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. 1055953 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 Tariff Concession Instrument No. 1055953 was enacted in 2011 under the Customs Act 1901 to address the issue of tariff concessions for specific goods, in this case certain off highway rear dump truck parts, by providing a lower rate of customs duty. This instrument was introduced to facilitate trade and economic efficiency by reducing the cost of importing these goods. The instrument was created by the Chief Executive Officer of Customs, who is empowered under section 269F of the Act to make such concessions if certain criteria are met. The policy objective behind this concession is to ensure that no substitutable goods were produced in Australia, thereby preventing domestic industry from being unfairly disadvantaged. The instrument was made effective from the date of application, 23 December 2010, and it provides a tariff rate of free for the specified goods, in contrast to the general rate of 5%.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to entities and individuals who seek to import goods into Australia and potentially benefit from a concessional rate of customs duty. The scope of the Act includes any goods that are the subject of a TCO application, provided they meet the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia at the time of application. The application process mandates that the CEO must ensure the goods are not specified in section 269SJ of the Act, which details goods ineligible for TCOs. The CEO's decision to grant a TCO is contingent on satisfying the core criteria, which is determined by the absence of substitutable goods in Australia and the ordinary course of business. Once a TCO is granted, it applies to the specific goods from the date of the application, as per section 269S(1) of the Act, thereby reducing or eliminating customs duty on those goods. Notably, the Act does not disadvantage any person by affecting their rights as at the date of the TCO registration and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1055953 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application meets the core criteria set out in sections 269C, 269B, and 269D, and no substitutable goods were produced in Australia as per section 269P(3), the CEO must issue a written order declaring that the goods are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995, resulting in a concessional duty rate. In this instance, certain off highway rear dump truck parts have been declared as goods to which item 50 of Schedule 4 applies, granting a duty rate of free, as opposed to the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must accept a TCO application as valid and publish a notice in the Gazette inviting submissions from interested parties, as outlined in subsection 269K(1). The CEO must also ensure that the application meets the core criteria and that no substitutable goods are produced in Australia. Additionally, importers of the goods subject to the TCO can apply for a refund of duty paid on those goods since the TCO is taken to have come into force, as stipulated in paragraph 126(1)(r) of the Regulations.
Failing to comply with the requirements of the Act or breaching the terms of a TCO can lead to various consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences, breaches of customs regulations generally may result in financial penalties, confiscation of goods, or other legal actions as per the Customs Act 1901 and associated regulations. The maximum penalties for breaches of customs laws can include substantial fines and, in severe cases, imprisonment. The specifics of any penalties would depend on the nature and severity of the breach.