EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516802
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.
Crown Equipment Pty Ltd applied for a TCO in respect of certain scissor lift pallet trucks on 16 December 2005.
Instrument
TCO No 0516802 was made on 10 March 2006. It declares that those certain scissor lift pallet 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 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. 0516802 is taken to have come into force on 16 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, enacted by the Commonwealth Parliament, provides a framework for the administration of customs duties and other charges. One of the mechanisms under this Act is the issuance of Tariff Concession Orders (TCOs) which allow for the reduction or exemption of customs duty on certain goods. The Tariff Concession Instrument No. 0516802 was introduced to address the specific need of applying a tariff concession to certain scissor lift pallet trucks. This instrument was created in response to an application by Crown Equipment Pty Ltd, aimed at ensuring that the application met the core criteria set out in the Customs Act, specifically that no substitutable goods were produced in Australia at the time of the application. The policy objective of this instrument is to facilitate the importation of these goods at a reduced or no customs duty, thereby potentially lowering costs for importers and increasing the competitiveness of such goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0516802, made under section 269F of the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been granted. The Act allows the Chief Executive Officer of Customs to apply lower rates of customs duty to goods that meet certain criteria, provided these goods are not specified in section 269SJ of the Act. Crown Equipment Pty Ltd successfully applied for a TCO in respect of certain scissor lift pallet trucks, resulting in Instrument TCO No. 0516802, which came into effect on 16 December 2005. This Instrument provides a free rate of duty on these goods, which otherwise would have been subject to a 5% duty under the general rate. The application of the TCO does not disadvantage any person other than the Commonwealth, and it does not impose any liabilities on any person. The TCO is effective from the date the application was lodged, and it benefits importers by allowing them to apply for a refund of duty on goods imported since that date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs), which can be applied for by any person under section 269F. If the Chief Executive Officer (CEO) of Customs determines that the goods in question are not those specified in section 269SJ, which lists items ineligible for a TCO, they must assess whether the application meets the core criteria outlined in section 269C. The primary condition is that no substitutable goods are produced in Australia at the time of application, as defined by sections 269D and 269E. If these criteria are met, the CEO must issue a written TCO, specifying that the goods in question are subject to a particular tariff item in Schedule 4 of the Customs Tariff Act 1995. This results in the application of a reduced or free duty rate for the goods, as seen in TCO No. 0516802, which applies a zero duty rate to certain scissor lift pallet trucks.
The Act imposes several obligations on parties applying for a TCO. Firstly, applicants must ensure that their application is valid, meaning it pertains to goods not listed in section 269SJ. Secondly, they must provide sufficient evidence that no substitutable goods are being produced in Australia at the time of application. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties, as stipulated in subsection 269K(1). This ensures transparency and allows for potential objections to be raised. The CEO must then consider any submissions before making a final decision on whether to issue a TCO.
Should any party fail to comply with the obligations or requirements outlined in the Act, several penalties and consequences may apply. Firstly, if an applicant submits a false application knowing it does not meet the core criteria, they may face legal repercussions. The Act does not specify particular penalties for these breaches, but general legal consequences for providing false information or fraudulent applications could include fines or other legal sanctions. Furthermore, any person who benefits unfairly from a TCO by not adhering to the conditions or misrepresenting facts may also face penalties. It is essential for all parties to adhere to the requirements set out in the Act to avoid these potential consequences.