EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101418
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.
Como Glasshouse Unit Trust applied for a TCO in respect of certain load carrying guided vehicles on 12 January 2011.
Instrument
TCO No 1101418 was made on 04 April 2011. It declares that those certain load carrying guided vehicles 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. 1101418 is taken to have come into force on 12 January 2011.
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. 1101418 was enacted in 2011 under the Customs Act 1901. The Act provides a framework for Tariff Concession Orders (TCOs) which allow for a lower rate of customs duty on specified goods. This particular instrument was introduced to address the gap in tariff concessions for certain load-carrying guided vehicles, ensuring they receive preferential treatment under the customs duty scheme. The instrument was made by the Chief Executive Officer of Customs, who is mandated by section 269F of the Act to consider applications for TCOs. The policy objective is to facilitate the importation of goods that are not produced domestically, thereby promoting competition and potentially reducing costs for importers. This approach aligns with the core criteria outlined in section 269C of the Act, which requires the CEO to confirm that no substitutable goods are produced in Australia. The implementation of TCO No. 1101418 has the effect of granting these vehicles a duty-free status, significantly benefiting importers by allowing them to claim refunds for duties paid prior to the instrument's effective date.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 1101418, pertains to the regulation of customs duty rates on specific imported goods, in this case certain load-carrying guided vehicles, through the creation and implementation of Tariff Concession Orders (TCO). This legislation applies to individuals or entities seeking to import these goods into Australia, aiming to provide them with a reduced rate of customs duty, in this instance, reducing it from 5% to free. The instrument extends to the entire Commonwealth of Australia and is administered by the Chief Executive Officer of Customs, who must ensure that the goods in question are not substitutable by locally produced alternatives. The Act mandates that the CEO must publish a notice in the Gazette inviting objections to a TCO application, though in this case, no objections were received. The TCO does not retroactively affect the rights or liabilities of any person other than the Commonwealth, and provides benefits to importers who may apply for a refund of duties paid on these goods since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1101418 under the Customs Act 1901 (section 269F) allow for the application by a person for a Tariff Concession Order (TCO) concerning certain goods, provided these goods are not specified in section 269SJ of the Act. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria outlined in sections 269C and 269P(3), they are mandated to issue a written TCO. For this particular instrument, the TCO No. 1101418 applies to certain load carrying guided vehicles, classifying them under item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby granting them a duty-free status.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to determine whether an application for a TCO meets the core criteria, specifically whether no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not be made, although in this instance, no submissions were received. Additionally, the Act ensures that the TCO does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for actions taken prior to the registration date.
The Act does not specify any direct offences or penalties for breaching the provisions of the TCO, but it does outline the consequences of such a breach. Any breach could potentially lead to the invalidation of the TCO and the reapplication of the general rate of duty to the goods in question. For instance, if the CEO improperly grants a TCO that does not meet the core criteria, it could be subject to review and possibly revoked, leading to the reintroduction of duties on the affected goods. The Act, however, does not provide for specific maximum penalties for these breaches, leaving such determinations to the discretion of the courts or administrative tribunals.
Overall, the Tariff Concession Instrument No. 1101418 aims to facilitate the importation of certain load carrying guided vehicles under more favourable tariff conditions, provided the statutory criteria are met. The process ensures transparency and allows for public consultation, while protecting the rights of importers and other stakeholders from undue disadvantage.