EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1102849
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.
Inlon Pty Ltd applied for a TCO in respect of certain agricultural self-loading and self-unloading trailers on 19 January 2011.
Instrument
TCO No 1102849 was made on 03 June 2011. It declares that those certain agricultural self-loading and self-unloading trailers 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. 1102849 is taken to have come into force on 19 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the imposition of customs duty on imported goods. A notable component of this legislative framework is Part XVA, which facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for a reduction or exemption of customs duty on specified goods, provided that certain criteria are met. This system aims to address the issue of ensuring that Australian industries do not face undue competition from locally produced goods, while also facilitating the import of necessary goods when no suitable domestic alternatives exist. Inlon Pty Ltd's application for a TCO concerning certain agricultural trailers exemplifies the application of this mechanism, resulting in Tariff Concession Order No. 1102849, which was issued on 3 June 2011, granting a duty-free status to the specified trailers from the date of application, 19 January 2011. The policy objective underpinning this legislative tool is to support Australian industries by preventing local production from being undercut by imported goods, while also enabling the import of goods that are not produced domestically.
Scope and Application
The Tariff Concession Instrument No. 1102849 under the Customs Act 1901 applies to specific agricultural self-loading and self-unloading trailers, which are granted a concession on customs duty rates as a result of this instrument. This Act applies to entities and individuals involved in the importation of these particular trailers, and it ensures that a lower rate of customs duty is applied to these goods as specified in the Instrument. The scope of this legislation is national, given its basis under the Commonwealth Customs Act 1901, and it does not extend beyond the national jurisdiction. The Act provides clear criteria for applications for tariff concessions and mandates that these applications must not pertain to goods specified in section 269SJ of the Act, which outlines goods that are ineligible for such concessions. Additionally, the CEO of Customs retains the authority to extend or restrict the application of this Act through subordinate instruments, ensuring flexibility and responsiveness to changes in trade conditions or policy objectives.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 1102849, revolve around the application and approval of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for the application of a TCO for goods, provided they are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Section 269C outlines the core criteria that must be met, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269P(3). If these criteria are satisfied, the Chief Executive Officer of Customs (CEO) must issue a TCO, as per section 269P(3). This particular TCO No. 1102849 was made on 03 June 2011 and declared that certain agricultural self-loading and self-unloading trailers are subject to a lower duty rate, specifically item 50 of Schedule 4 to the Tariff, with a duty rate of free instead of the general rate of 5%.
The obligations imposed by this Act on the parties it governs include the requirement for applicants to ensure that their goods do not fall within the category of goods that cannot be subject to a TCO, as specified in section 269SJ. Additionally, the CEO must adhere to the legislative requirements to assess applications against the core criteria and publish notices in the Gazette inviting submissions from interested parties, as outlined in subsection 269K(1). The CEO's role also includes ensuring that the TCO does not adversely affect the rights of any person other than the Commonwealth, as stipulated in subsection 269S(1), and that the TCO provides benefits such as duty refunds to importers under paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901 or the conditions of a TCO can result in significant consequences. While the explanatory statement does not specify detailed penalties, breaches of customs regulations generally can result in penalties under the Customs Act 1901. These can include substantial fines, with the maximum penalty often depending on the severity and intent of the breach. In civil matters, incorrect application or reliance on a TCO might lead to disputes that could be resolved through the courts, potentially resulting in compensation or other remedies. In criminal cases, serious breaches might lead to prosecution with penalties that include imprisonment, reflecting the seriousness of the offence under Australian law.