EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1110478
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.
Hitachi Construction Machinery applied for a TCO in respect of certain grease pumps on 28 March 2011.
Instrument
TCO No 1110478 was made on 20 June 2011. It declares that those certain grease pumps 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. 1110478 is taken to have come into force on 28 March 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. 1110478 was enacted in 2011 under the Customs Act 1901 to provide tariff concessions for certain grease pumps imported into Australia, addressing a gap in the duty-free import eligibility for these specific goods. The instrument was created to facilitate easier access to these goods by reducing the customs duty rate from 5% to free, provided that no substitutable goods were produced in Australia. This was achieved by the Chief Executive Officer of Customs determining that the application met the core criteria as outlined in the Customs Act. The process involved publishing a notice in the Gazette to invite submissions, although none were received, and the tariff concession took effect from the date the application was lodged. This initiative aims to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 1110478 under the Customs Act 1901 applies to specific goods, in this case certain grease pumps, for which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs (CEO). The TCO applies to these goods as of the date the application was lodged, which is 28 March 2011, according to the relevant provisions of the Customs Act. The Act extends its application to any goods for which a TCO can be granted, provided they meet the core criteria specified, particularly the absence of substitutable goods produced in Australia. The geographic reach of this Act is national, as it pertains to the Commonwealth's customs duties. The TCO itself does not disadvantage or impose liabilities on any person other than the Commonwealth, and it does not affect any pre-existing rights as of the date of registration. Furthermore, while the Act allows for the possibility of subordinate instruments to further extend or clarify its application, the specific TCO No. 1110478 focuses narrowly on the grease pumps in question.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1110478 (Section 269F) under the Customs Act 1901 permit the Chief Executive Officer of Customs (CEO) to grant a Tariff Concession Order (TCO) for goods if the application meets certain criteria. Specifically, the CEO must determine if the application is valid under Section 269SJ, which excludes certain goods from TCOs. If the CEO finds that the application meets the core criteria (Section 269C), they must issue a TCO (Section 269P(3)), applying a lower rate of customs duty to the goods. For the particular case of Hitachi Construction Machinery's grease pumps, Section 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a free duty rate instead of the general 5% duty.
The Act imposes several obligations on the CEO and applicants. The CEO is required to assess whether an application meets the core criteria and, if satisfied, issue a TCO (Section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties (Section 269K(1)). Hitachi Construction Machinery, as the applicant, must ensure that their application meets the criteria and provides all necessary information to facilitate the CEO's assessment. Additionally, the CEO's decision to grant or refuse a TCO must be made transparently and in accordance with the statutory requirements.
Failure to comply with the requirements of the Customs Act 1901 can result in legal consequences. Under Section 269N of the Act, a person who contravenes the provisions of a TCO can be subject to civil or criminal penalties. Civil penalties can include fines up to the maximum specified under the relevant legislation, while criminal penalties may include fines and/or imprisonment. For instance, under the Crimes Act 1914, an individual could face a fine of up to 120 penalty units or imprisonment for six months, or both, for a serious breach. The exact penalties depend on the nature and severity of the breach, with the maximum penalties outlined in the relevant Acts and Regulations.