EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0101093
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.
Crown Equipment Pty Ltd applied for a TCO in respect of certain forklift trucks on 1 February 2001.
Instrument
TCO No 0101093 was made on 9 February 2007. It declares that those certain forklift trucks 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 0%.
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. One submission objecting to the TCO application was received from Crown Equipment Pty Ltd.
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. 0101093 is taken to have come into force on 1 February 2001.
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. 0101093, enacted in 2007, addresses the need for tariff concessions on specific goods, as outlined under the Customs Act 1901. This legislation was introduced to provide relief from customs duties for particular goods, enabling a more competitive environment for businesses importing these items. The Customs Act 1901, enacted by the Parliament of Australia, serves as the foundational statute, with Part XVA establishing the framework for Tariff Concession Orders (TCOs). The primary policy objective is to facilitate reduced customs duty rates for goods that meet specific criteria, thereby supporting the economic interests of businesses by lowering their import costs.
This instrument specifically pertains to Crown Equipment Pty Ltd's application for tariff concessions on certain forklift trucks, where the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were produced in Australia. Consequently, the CEO issued Tariff Concession Order No. 0101093, effective from 1 February 2001, reducing the duty rate from 5% to 0% for these forklift trucks. The legislation ensures that the rights of importers are beneficially affected and that no existing rights or liabilities are adversely impacted, while also providing an opportunity for public consultation on tariff concession applications.
Scope and Application
The Tariff Concession Instrument No. 0101093 under the Customs Act 1901 applies to individuals or entities that have applied for tariff concession orders (TCOs) on specific goods, in this case, certain forklift trucks. The Act allows for a lower rate of customs duty on goods subject to a TCO if no substitutable goods are produced in Australia in the ordinary course of business. The CEO of Customs is responsible for assessing applications and making decisions on whether to grant TCOs. The scope of the Act is national, applying across all jurisdictions in Australia. The application of this particular TCO, however, only affects the rights of importers, who will benefit from a refund of duty on goods imported since the effective date of the TCO. The Act does not disadvantage or impose liabilities on any person, except the Commonwealth, for actions taken before the TCO's registration date. The instrument can extend its application through subordinate instruments, although no specific examples are provided in the explanatory statement.
Key Provisions
The Tariff Concession Instrument No. 0101093 (the Instrument) under the Customs Act 1901 (the Act) concerns the application of tariff concessions to certain forklift trucks, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. This Instrument declares that these forklift trucks are subject to a 0% customs duty rate, as opposed to the general rate of 5%, following an application by Crown Equipment Pty Ltd on 1 February 2001. The Instrument was issued on 9 February 2007, following the determination by the Chief Executive Officer of Customs (CEO) that no substitutable goods were being produced in Australia on the date the application was lodged, thereby meeting the core criteria stipulated in section 269C of the Act.
Entities or individuals subject to this Instrument are obligated to adhere to the terms outlined therein, particularly in relation to the classification and duty rates of the specified forklift trucks. This involves ensuring compliance with the reduced customs duty rate of 0% for these goods, as established by the Instrument, and recognising the legal effect of the TCO as having commenced on the date of the application, 1 February 2001, under subsection 269S(1) of the Act. The CEO’s decision to grant the TCO was made after assessing that the application met the criteria in section 269C, which requires that no substitutable goods were being produced in Australia at the time of the application, as clarified in section 269D and section 269E of the Act.
Failure to comply with the terms of the Instrument may lead to legal consequences. Although the explanatory statement does not explicitly enumerate specific offences or penalties, breaches of customs regulations generally may attract civil or criminal penalties as provided under the Customs Act 1901 and other related legislation. These penalties could include fines, imprisonment, or other legal sanctions depending on the nature and severity of the breach. The Act and associated regulations provide a framework within which such breaches are addressed, including potential administrative actions by Customs and enforcement through the courts.