EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602271
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 Pty Ltd applied for a TCO in respect of certain disabled lifts on 16 January 2006.
Instrument
TCO No 0602271 was made on 7 April 2006. It declares that those certain disabled 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. 0602271 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 was amended to introduce the Tariff Concession Order (TCO) scheme, which allows for the reduction or elimination of customs duty on certain imported goods under specific circumstances. Enacted by the Australian Parliament, this scheme aims to address the gap in the tariff system by providing relief for goods that are not produced domestically or for which there are no suitable Australian substitutes. The policy objective is to support industries and consumers by making imported goods more affordable, thus encouraging trade and competition. This approach is designed to benefit importers who can now potentially apply for refunds on duties paid on these goods since the TCO's effective date, further promoting economic efficiency and consumer welfare.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to any individual or entity seeking to import goods into Australia, provided the goods are not specified in section 269SJ, which lists those ineligible for TCOs. The application process involves submitting a request to the CEO, who must determine whether the application meets the core criteria outlined in sections 269C, 269D, and 269E of the Act. If these criteria are met and the CEO is satisfied that no substitutable goods are produced in Australia, a TCO is issued, granting a lower rate of customs duty on the specified goods. The TCO No. 0602271, for example, concerns certain disabled lifts and was issued on 7 April 2006, reducing the duty rate from 5% to free for these goods, effective from 16 January 2006. The Act's jurisdiction spans the Commonwealth, and its application can be extended or restricted via subordinate instruments, although no such extensions or restrictions are noted in this particular instance.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269S. Section 269F permits a person to apply to the Chief Executive Officer of Customs (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, which sets out those goods that cannot be subject to a TCO, they must then decide if the application meets the core criteria (section 269C). If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes several obligations on the parties involved. For the CEO, the main obligations include accepting a valid TCO application, publishing a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made (subsection 269K(1)), and making a TCO if the application meets the core criteria. For applicants, the main obligation is to ensure that the goods they are applying for are not specified in section 269SJ and that the application is made in accordance with the requirements of the Act. The CEO must ensure that no substitutable goods were produced in Australia on the day the application was lodged.
The Act also outlines consequences for breaches. While the explanatory statement does not specify particular offences or penalties, it is reasonable to infer that failure to comply with the Act's provisions could result in the TCO being invalid or the applicant facing legal consequences under other relevant sections of the Customs Act 1901. The absence of specific penalties in the explanatory statement suggests that compliance is critical, and any breaches could lead to civil or criminal consequences depending on the nature and severity of the breach. Importers, however, will benefit from being able to apply for a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations.
Overall, the Act aims to streamline the process for obtaining tariff concessions for certain goods while ensuring that the rights of all parties are protected and that any concessions granted are fair and justifiable.