EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105005
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.
Pomaus Earthmoving Sales And Service applied for a TCO in respect of certain off-highway dumpers on 04 February 2011.
Instrument
TCO No 1105005 was made on 29 April 2011. It declares that those certain off-highway dumpers 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. 1105005 is taken to have come into force on 04 February 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. 1105005 was enacted in 2011 under the Customs Act 1901 to address the need for tariff concessions on specific goods that are not produced domestically. The instrument was created to facilitate tariff reductions for certain off-highway dumpers, as requested by Pomaus Earthmoving Sales And Service. The objective is to provide a lower rate of customs duty on these goods, aligning with the policy under section 269F of the Act, which allows for tariff concessions if certain criteria are met. The instrument was introduced by the Chief Executive Officer of Customs and is intended to benefit importers by reducing the duty on these goods from the general rate of 5% to free. The instrument came into effect on 04 February 2011, the date the application was lodged, and does not impose any new liabilities or adversely affect the rights of any person as of the date of registration.
Scope and Application
The Tariff Concession Instrument No. 1105005, made under the Customs Act 1901, applies to certain off-highway dumpers and is concerned with the granting of tariff concessions by the Chief Executive Officer of Customs. The instrument operates within the scope of the Customs Act 1901, which allows for the creation of Tariff Concession Orders (TCOs) to provide reduced rates of customs duty on specified goods, provided that these goods are not substitutable by products already produced in Australia. The TCO No. 1105005, effective from 4 February 2011, was made in response to an application by Pomaus Earthmoving Sales And Service, and it declares that the specified off-highway dumpers are subject to a zero duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, down from the general rate of 5%. The instrument does not apply to any goods specified in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. The geographic reach of this TCO is national, as it pertains to the customs duty regulations of Australia. The instrument does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any existing rights as at the date of registration.
Key Provisions
The primary provisions of this instrument, TCO No. 1105005, are found in section 269F (2) of the Customs Act 1901. This section outlines the process whereby an application can be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). The instrument itself, as per section 269P (3), declares that the off-highway dumpers in question are subject to a zero rate of duty, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. This effectively means that these particular goods are exempt from the usual 5% customs duty.
In terms of obligations, section 269C of the Customs Act 1901 stipulates that an application for a TCO will be considered valid only if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. The CEO is required to ensure that this criterion is met before granting a TCO. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made. In this instance, no submissions were received, as noted in subsection 269K(1) of the Act. Furthermore, the TCO, once issued, does not affect any existing rights or liabilities of persons other than the Commonwealth, as per subsection 269S(1).
Failure to comply with the requirements of the Customs Act 1901 in relation to TCOs could lead to various legal consequences. While the explanatory statement does not detail specific offences, penalties, or consequences, the Customs Act generally imposes fines and imprisonment for breaches. For example, section 286 of the Customs Act provides for penalties, including fines up to $16,200 for individuals and $81,000 for bodies corporate, along with potential imprisonment for serious offences. The severity of penalties would depend on the nature and extent of the breach, as well as any aggravating factors.