EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0208347
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.
Toyota Motor Corporation Pty Ltd applied for a TCO in respect of certain forklift trucks on 9 September 2002.
Instrument
TCO No 0208347 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. 0208347 is taken to have come into force on 9 September 2002.
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. 0208347 was enacted in 2007 under the Customs Act 1901, aiming to address the need for tariff concessions on specific imported goods where no substitutable goods are produced in Australia. This legislation facilitates the application process for Tariff Concession Orders (TCOs) by enabling the Chief Executive Officer of Customs to grant lower customs duty rates on certain imported goods, provided they meet the specified criteria. The primary objective of this instrument is to ensure that Australian consumers and businesses can access competitively priced goods that are not produced domestically, thereby enhancing market efficiency and consumer choice. The instrument was developed in response to an application by Toyota Motor Corporation Pty Ltd for tariff concessions on certain forklift trucks, and it was implemented to provide a zero percent duty rate on these goods, down from the general rate of five percent.
The enactment of this instrument by the relevant legislature was designed to streamline the process for obtaining tariff concessions, ensuring that the Chief Executive Officer of Customs could efficiently assess and approve applications that align with the legislative criteria. The policy objective is to facilitate the import of goods that are not locally manufactured, thus supporting economic activities that benefit from lower input costs. This, in turn, helps maintain competitive pricing and encourages the efficient allocation of resources within the Australian market. The process includes public consultation to allow stakeholders to voice any objections to the proposed concessions, as mandated by the Customs Act 1901, thereby promoting transparency and inclusiveness in the decision-making process.
Scope and Application
The Tariff Concession Instrument No. 0208347 pertains to the Customs Act 1901 and facilitates the application of reduced customs duty rates to specified goods through the creation of Tariff Concession Orders (TCOs). The Act applies to any individual or entity seeking to import goods that are eligible for a tariff concession. The scope of the Act is national, extending across the Commonwealth of Australia, as it operates under the authority of the Customs Act 1901. The Act does not apply to goods that are explicitly excluded under section 269SJ of the Act, which includes items that are already produced in Australia in the ordinary course of business and those that are substitutable to the goods in question. The CEO has the discretion to make a TCO if the application meets the core criteria, including the absence of substitutable goods produced in Australia, as defined by sections 269C, 269D, 269E, and 269F of the Act. The application process also requires public consultation, inviting objections to the proposed TCO, as stipulated in subsection 269K(1) of the Act. The TCO in question was made effective from the date the application was lodged, 9 September 2002, and does not affect pre-existing rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901, which establish the framework for Tariff Concession Orders (TCOs). Section 269F allows for the application of a TCO to certain goods, provided the application meets the core criteria set out in section 269C. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, section 269P requires the CEO to issue a written order granting the tariff concession. The TCO specifies the goods to which a reduced rate of customs duty applies.
Under the Customs Act 1901, the CEO is obligated to assess any TCO application to determine if it meets the core criteria. If the application is deemed valid, the CEO must make a written order declaring that the specified goods are subject to the tariff concession. Additionally, as soon as practicable after accepting a TCO application, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO (subsection 269K(1)). The CEO must consider these submissions before making a final decision.
The legislation imposes several requirements on the parties involved. The applicant for a TCO must ensure that their application meets the core criteria, particularly that no substitutable goods are produced in Australia on the day the application is lodged (section 269C). The CEO of Customs is required to process the application, consider any submissions, and make a decision based on the merits of the application and submissions received. Once a TCO is issued, it comes into effect on the day the application was lodged (subsection 269S(1)), meaning that importers can apply for refunds of duty paid on goods imported since that date.
In terms of consequences for breach, the Customs Act 1901 does not specify any particular offences or penalties for failing to comply with the provisions of a TCO. However, the general provisions of the Act provide for penalties for various breaches of customs laws, including fines and imprisonment. For example, under section 216 of the Act, a person who knowingly imports goods in contravention of the Act may be liable to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Similarly, section 217 imposes penalties for supplying false or misleading information in relation to customs matters.