EXPLANATORY STATEMENT
Tariff Concession Instrument No.0503522
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.
Doppelmayr Australia Pty Ltd applied for a TCO in respect of certain passenger moving and carrying ropeways on 22 March 2005.
Instrument
TCO No 0503522 was made on 10 June 2005. It declares that those certain passenger moving and carrying ropeways 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. 0503522 is taken to have come into force on 22 March 2005.
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. 0503522, enacted in 2005, addresses the need for a streamlined process to grant tariff concessions on specific goods, in this case certain passenger moving and carrying ropeways, under the Customs Act 1901. The Customs Act 1901 provides a framework for the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) that allow for reduced customs duty rates on goods not produced in Australia. Doppelmayr Australia Pty Ltd applied for a TCO for these particular ropeways on 22 March 2005, and after determining that no substitutable goods were produced domestically, the CEO issued Instrument TCO No. 0503522 on 10 June 2005. This instrument sets the duty rate for these goods at free, down from the general rate of 5%, and it came into effect on the date the application was lodged. The legislation ensures that the rights of importers are beneficially affected, allowing them to apply for duty refunds on imports made since the TCO’s effective date, while not imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0503522 under the Customs Act 1901 applies to goods specified in the application submitted by Doppelmayr Australia Pty Ltd on 22 March 2005. The Act provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders, which lower the customs duty on goods if certain criteria are met. The geographic and jurisdictional reach of this Act is Commonwealth, as it pertains to the regulation of customs duties within Australia. The instrument applies to the specific passenger moving and carrying ropeways that Doppelmayr sought to have concessionary tariff rates applied to, and it does not affect the rights of any person other than the Commonwealth. This particular TCO was made under section 269P(3) of the Customs Act 1901, declaring that these specified goods are subject to a zero rate of duty, differing from the general rate of 5% set out in the Customs Tariff Act 1995. The application of the TCO does not extend to goods that cannot be subject to a TCO as specified in section 269SJ of the Customs Act 1901, nor does it impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0503522 under the Customs Act 1901, establishes a concession in customs duty for certain passenger moving and carrying ropeways. Section 269F (1) allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). This instrument specifically pertains to certain passenger moving and carrying ropeways as applied for by Doppelmayr Australia Pty Ltd on 22 March 2005. The CEO, satisfied that the application met the core criteria, made the order on 10 June 2005, and it is deemed to have come into force on the date of the application, 22 March 2005 (subsection 269S(1)). The concession applies to these goods under item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the general duty rate of 5% to zero.
The obligations imposed by the Act on the parties are primarily on the CEO, who must ensure that the application for a TCO is valid and meets the core criteria as outlined in section 269C of the Act. This involves confirming that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). In this case, the CEO did not receive any submissions in response to the published notice.
For breaches of the Act or the regulations, penalties can be substantial. While the specific penalties are not detailed in the Explanatory Statement, the general penalties for contravening the Customs Act 1901 can include fines and imprisonment. For example, section 222 of the Act provides for fines of up to 10,000 penalty units and/or imprisonment for up to 10 years for serious offences. The penalties reflect the seriousness of the breach and aim to deter non-compliance with the legislative requirements. The Act also includes provisions for civil penalties, which can be significant and are designed to ensure compliance with the customs duties and other related obligations.