EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603529
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.
Easy Living Home Elevators applied for a TCO in respect of certain hydraulic lifts on 8 February 2006.
Instrument
TCO No 0603529 was made on 21 April 2006. It declares that those certain hydraulic 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. 0603529 is taken to have come into force on 8 February 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 Tariff Concession Instrument No. 0603529, made under the Customs Act 1901, was enacted to facilitate tariff concessions for specific goods, in this case, certain hydraulic lifts. This legislation was introduced to address the need for a streamlined process through which businesses could apply for and obtain tariff concessions, ensuring that goods for which no substitutable Australian-produced alternatives exist are afforded a reduced rate of customs duty. The Tariff Concession Orders (TCO) scheme, as outlined in Part XVA of the Customs Act, empowers the Chief Executive Officer of Customs to make such orders upon satisfying specific criteria. The primary policy objective of this Act is to foster competitive advantage for Australian businesses by reducing the cost of importing goods that are not produced domestically.
The enacting body, the Parliament of Australia, established this framework to ensure that the application process for tariff concessions is transparent and accessible, with provisions for public consultation. In the case of TCO No. 0603529, Easy Living Home Elevators applied for and successfully obtained a concession for certain hydraulic lifts, leading to a reduction in the customs duty rate from 5% to free. This measure not only benefits the applicants by lowering their import costs but also supports the broader objective of promoting economic efficiency and fairness in the importation of goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, designed to lower the customs duty on specified goods. This legislation applies to individuals or entities who wish to import goods and qualify for tariff concessions. These concessions are contingent on the goods not being produced in Australia in the ordinary course of business, as defined by the Act. The TCO mechanism is available nationally across Australia, encompassing all states and territories, under the overarching authority of the Commonwealth. The application process mandates that the CEO must ensure the goods in question meet the core criteria stipulated in the Act, particularly by verifying that no substitutable goods are produced domestically. The instrument extends its application through subordinate legislation, with the Tariff Concession Instrument No. 0603529 being a specific example, which provides for the tariff concession on certain hydraulic lifts. Notably, this instrument does not disadvantage any pre-existing rights of individuals or entities and does not impose new liabilities.
Key Provisions
The Tariff Concession Order No. 0603529 (referred to as TCO No. 0603529) made under the Customs Act 1901 (the Act) applies a concessional rate of customs duty to certain hydraulic lifts, specifically those that are the subject of the order. Section 269P(3) of the Act requires that the Chief Executive Officer of Customs (the CEO) must make a written order if satisfied that the application meets the core criteria. These criteria include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, as defined in sections 269C and 269D of the Act. In this case, the CEO determined that the hydraulic lifts in question were not substitutable by any goods produced in Australia, hence the concessional rate of duty of free, as opposed to the general rate of 5%, was applied.
The obligations imposed by the Act on the CEO include the assessment of the TCO application against the core criteria and the publication of a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1) of the Act). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on any person in respect of anything done or omitted before the TCO's registration date (subsection 269S(1) of the Act). TCO No. 0603529 was made on 21 April 2006 and is taken to have come into force on 8 February 2006, the date the application was lodged.
There are no specific offences, penalties, or civil/criminal consequences mentioned for breach of the provisions of TCO No. 0603529 within the explanatory statement. However, any breach of the Customs Act 1901 or associated regulations could lead to civil or criminal penalties as prescribed under the relevant sections of the Act or other legislation. For instance, misleading or incorrect information provided in a TCO application could lead to penalties under the Customs Act, including fines and imprisonment. Importers who benefit from the TCO may also be subject to the general compliance and reporting requirements of the Customs Act and associated regulations.