EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516755
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.
Manitou Australia Pty Ltd applied for a TCO in respect of certain forklift trucks on 6 December 2005.
Instrument
TCO No 0516755 was made on 1 May 2006. 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.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Crown Equipment Pty Ltd to lodge a written submission.
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. 0516755 is taken to have come into force on 6 December 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 was enacted by the Parliament of Australia to regulate customs and excise matters. One of the gaps it was introduced to address is the need for a streamlined process to provide tariff concessions on specific goods, thereby facilitating trade and economic benefits. Tariff Concession Order No. 0516755 was introduced to provide tariff concessions for certain forklift trucks, reducing the customs duty from 5% to 0%, as no substitutable goods were produced in Australia. This was achieved under section 269C of the Act, which requires the Chief Executive Officer of Customs to ensure that no substitutable goods were produced in Australia when deciding on the concession. The order was made on 1 May 2006 and is taken to have come into force on 6 December 2005, the date the application was lodged. The policy objective is to encourage trade by reducing the duty on these goods, as articulated under section 269P(3) of the Act.
Scope and Application
The Tariff Concession Instrument No. 0516755 under the Customs Act 1901 applies to goods specified in the instrument, which in this instance are certain forklift trucks. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the customs duty on specified goods if certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument was made on 1 May 2006 and came into effect on 6 December 2005, the date on which the application for the concession was lodged. It applies nationally across Australia and benefits importers of the specified forklift trucks by reducing their duty liability to zero. The instrument does not disadvantage any existing rights or impose new liabilities on any person other than the Commonwealth. Additionally, the Act mandates consultation processes, including public notices in the Gazette and direct invitations to interested parties to submit objections or comments, ensuring transparency and fairness in the decision-making process.
Key Provisions
The primary operative sections of the Customs Act 1901 (section 269C) require that for a Tariff Concession Order (TCO) to be made, the Chief Executive Officer of Customs (CEO) must be satisfied that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. This provision ensures that the goods in question are unique and not readily replaceable by Australian-made alternatives. Once these criteria are met, the CEO must then proceed to issue a TCO, which specifies that the goods in question will be subject to a lower rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). For instance, in the case of Manitou Australia Pty Ltd's application for certain forklift trucks, the CEO determined that no substitutable goods were produced in Australia, and thus, a TCO was issued, resulting in a zero percent duty rate for these specific forklift trucks.
The Act imposes several obligations on the parties involved, including the requirement for the CEO to publish a notice in the Gazette inviting submissions from interested parties who may oppose the TCO application (subsection 269K(1)). In the case of Manitou Australia Pty Ltd, the CEO published such a notice, and Crown Equipment Pty Ltd submitted an objection. Additionally, the CEO can invite specific persons who may have a reason to oppose the TCO to lodge a written submission (subsection 269M(1)). This process ensures transparency and allows all stakeholders to voice their concerns regarding the TCO. Furthermore, the Act stipulates that a TCO comes into effect on the day the application is lodged, which means that the rights of importers are beneficially affected from that date (subsection 269S(1)).
Under the Customs Act 1901, breaches of the provisions related to TCOs could potentially lead to various civil or criminal consequences. However, the specific offences, penalties, or consequences for breach are not detailed within the text provided. In general, the Act outlines that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on a person in respect of actions taken before the registration date (subsection 269S(1)). This safeguard ensures that the implementation of a TCO does not unfairly impact existing rights or impose retroactive liabilities. In the event of non-compliance with the terms of the TCO or other related regulations, the applicable penalties would typically be determined by the broader customs legislation and could include fines or other sanctions, though the exact penalties are not specified in the provided text.