EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602270
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.
Multilift Commercial applied for a TCO in respect of certain geared lifts on 16 January 2006.
Instrument
TCO No 0602270 was made on 24 March 2006. It declares that those certain geared 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 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. 0602270 is taken to have come into force on 16 January 2006.
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, provides a framework for the regulation of customs and excise duties, and establishes the mechanism for Tariff Concession Orders (TCOs) to offer relief from customs duty on certain goods. The Act was updated to address the need for more flexible tariff arrangements that could respond to specific economic circumstances, such as the absence of local production of certain goods, thereby ensuring that Australian consumers and businesses could access competitively priced goods. The Tariff Concession Instrument No. 0602270, issued on 24 March 2006, is an example of this mechanism in action, granting a concession on customs duty for certain geared lifts as requested by Multilift Commercial. The policy objective is to ensure that Australian businesses can import goods without the burden of high tariffs, provided no suitable substitute is produced locally. The instrument was introduced following a process that included an opportunity for public consultation, with no objections received, ensuring that the decision aligned with broader economic policy goals.
Scope and Application
The Tariff Concession Instrument No. 0602270 is a legislative measure under Part XVA of the Customs Act 1901, specifically designed to facilitate the granting of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to individuals or entities that apply for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act as those that cannot be subject to a TCO. The application process is contingent upon meeting core criteria, notably the absence of substitutable goods produced in Australia at the time of application, as defined by sections 269C, 269D, and 269E. The application process also mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although in the case of TCO No. 0602270, no such submissions were received. The legislation applies nationally, and the TCOs do not retroactively disadvantage any person or impose liabilities for actions prior to the TCO's effective date. Instead, the TCO benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Order No. 0602270 under the Customs Act 1901 (section 269F) allow for the application for a tariff concession order (TCO) in respect of specific goods. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, as outlined in section 269C, a TCO can be made. Section 269P(3) mandates the CEO to issue a written order, the TCO, if the criteria are met. In this case, the TCO No. 0602270 made on 24 March 2006, declares that certain geared lifts are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty-free status for these goods.
The obligations imposed by the Act on the parties governed by it include the requirement for applicants to ensure their TCO applications meet the core criteria, particularly that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO is obliged to review these applications, consider any submissions, and decide whether to grant a TCO. The CEO must also publish a notice in the Gazette inviting any interested parties to make submissions if they believe the TCO should not be granted. The CEO is required to consider any such submissions before making a final decision.
The legislation imposes certain consequences for breaches, although specific offences and penalties are not detailed in the explanatory statement. Generally, under the Customs Act 1901, breaches of the Act can result in civil or criminal penalties. Civil penalties may include fines up to the maximum prescribed by law, while criminal penalties may include imprisonment, reflecting the severity of the breach. In this context, any improper application for a TCO or misuse of the concession could lead to such penalties, though the exact nature and extent would depend on the specific breach and relevant legal provisions.
In summary, the Act provides a framework for the application and grant of TCOs, setting out clear criteria and obligations for applicants and the CEO. The consequences for non-compliance, though not explicitly detailed in the explanatory statement, generally involve significant penalties, underscoring the importance of adhering to the legislative requirements.