EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513655
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 0513655 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. 0513655 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 Customs Act 1901, enacted by the Australian Parliament, serves as the primary legislation governing customs and border control matters in Australia. In 2006, the Tariff Concession Instrument No. 0513655 was introduced to address a specific gap in the application process for Tariff Concession Orders (TCOs). This instrument was established to streamline and clarify the process by which businesses could apply for reduced customs duty rates on certain goods. The policy objective was to provide a clear pathway for applicants to secure tariff concessions, ensuring that the application process was transparent and accessible while maintaining the integrity of the customs duty system. The instrument specifies the criteria for applications and the process for the Chief Executive Officer of Customs to assess and approve these applications, ensuring that only goods for which no substitutable Australian-produced alternatives exist are eligible for tariff concessions.
Scope and Application
The Customs Act 1901 applies to the process of making Tariff Concession Orders (TCOs), which are orders that provide lower rates of customs duty on certain goods. These orders can be applied for by any person and are subject to the approval of the Chief Executive Officer of Customs (CEO). The Act applies to both individuals and entities who seek to import goods that qualify for a tariff concession. The scope of the Act includes the assessment of whether substitutable goods are produced in Australia, which determines the eligibility for a TCO. Geographically, the application of the Act is national, extending across all states and territories of Australia. The Act does not apply to goods specified in section 269SJ, which are those that cannot be subject to a TCO. The application of the Act may be further detailed or restricted through subordinate instruments such as regulations or subsidiary legislation.
Key Provisions
The primary operative sections of this legislation concern the process for making Tariff Concession Orders (TCOs) under the Customs Act 1901 (sections 269C, 269B, 269D, 269E, and 269F). These sections establish the criteria for what constitutes substitutable goods and ordinary course of business, and set out the conditions under which the Chief Executive Officer of Customs (CEO) must make a TCO if an application meets the core criteria (section 269P). Specifically, section 269C mandates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269F allows a person to apply to the CEO for a TCO, provided the goods in question are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)).
The obligations imposed by the Act on parties include the requirement for the CEO to consider applications for TCOs and to publish notices in the Gazette inviting submissions from any person who may have reasons why a TCO should not be made (subsection 269K(1)). In the case of TCO No. 0513655, Kone Elevators Pty Ltd applied for a concession on certain Gearless Lifts, and the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of the TCO. Importers of the specified goods are entitled to apply for a refund of duty on goods imported since the day the TCO came into force, which is the same day the application was lodged (paragraph 126(1)(r) of the Regulations).
The legislation does not explicitly state any specific offences, penalties, or consequences for breach. However, any failure by the CEO to comply with the requirements to consider applications and make TCOs where appropriate could potentially lead to legal challenges or administrative review. The Act ensures that the rights of a person, other than the Commonwealth, are not adversely affected by the TCO, and that no liabilities are imposed on any person for actions taken before the TCO comes into force (subsection 269S(1)). The CEO did not receive any submissions in response to the notice published in the Gazette for TCO No. 0513655, indicating that no objections were raised against the issuance of the concession.