EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513654
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.
Kone Elevators Pty Ltd applied for a TCO in respect of certain Gearless Lifts on 10 October 2005.
Instrument
TCO No 0513654 was made on 3 January 2006. It declares that those certain Gearless Lifts 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. 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. 0513654 is taken to have come into force on 10 October 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. 0513654, enacted on 3 January 2006 under the Customs Act 1901, was introduced to address the need for tariff concessions on specific imported goods. This instrument allows for lower rates of customs duty on certain Gearless Lifts, as applied for by Kone Elevators Pty Ltd, by declaring that these goods are subject to a zero percent duty rate instead of the general five percent rate. The Customs Act 1901 facilitates the application process for Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs, who must ensure that the application meets core criteria, including the non-existence of substitutable goods produced in Australia. The instrument was made following a valid application on 10 October 2005 and is effective from that date, providing beneficial rights to importers who can apply for duty refunds on imports since the TCO came into force. This legislative measure ensures that no liabilities are imposed on any person and does not disadvantage anyone who held rights prior to the registration date.
Scope and Application
The Tariff Concession Instrument No. 0513654 applies to any person or entity seeking a reduction in customs duty on specific goods, namely certain Gearless Lifts, as defined in the instrument. This Act operates under the Customs Act 1901, specifically targeting the application of Tariff Concession Orders (TCO) to reduce customs duty on goods that meet the specified criteria. The instrument is effective as of the date the application was lodged, which was 10 October 2005, and it applies to the Commonwealth of Australia, impacting imports at a national level. The Act ensures that no person other than the Commonwealth is disadvantaged or subjected to new liabilities as a result of this concession. Additionally, the Act does not extend to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for such tariff concessions. The CEO's decision to grant the TCO is final unless challenged through the processes outlined in the Customs Act 1901.
Key Provisions
The Customs Act 1901 (the Act) enables the Chief Executive Officer of Customs (the CEO) to make Tariff Concession Orders (TCOs) under section 269F, which allows for a lower rate of customs duty on goods that meet certain criteria. Section 269C specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. These terms are defined in sections 269D, 269E, and 269P(3). If the CEO is satisfied that the application meets these criteria, a written order must be made, declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as stated in subsection 269P(3). This process was followed in the case of Kone Elevators Pty Ltd, who applied for a TCO for certain Gearless Lifts on 10 October 2005, which was granted and came into effect on that date.
The Act imposes several obligations on the CEO and the applicants for TCOs. According to section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO is also required to decide whether the application meets the core criteria under section 269C. Additionally, under section 269S(1), a TCO is taken to have come into force on the day the application was lodged. These obligations ensure that the process for granting TCOs is transparent and fair.
Section 269SJ of the Act specifies that certain goods cannot be subject to a TCO. If a person applies for a TCO in respect of these specified goods, the CEO is not permitted to make a TCO under section 269SJ. Failure to adhere to these provisions may result in the TCO being invalid, leading to potential financial repercussions for the applicant. Furthermore, section 269P(3) mandates that the CEO must make a written order if the application meets the core criteria, which if not complied with, could lead to legal consequences.
Any breach of the provisions of the Customs Act 1901 can result in both civil and criminal penalties. Civil penalties can include fines, compensation to affected parties, or other financial penalties as determined by the court. Criminal penalties can include imprisonment, fines, or both, depending on the severity of the breach. The maximum penalties are not specified in the text but can be determined based on the specific breach and jurisdiction. The Act provides for enforcement mechanisms to ensure compliance with its provisions, and non-compliance can lead to legal action being taken against the offending party.