EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606141
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.
Eastern Elevators applied for a TCO in respect of certain lift parts on 10 April 2006.
Instrument
TCO No 0606141 was made on 30 June 2006. It declares that those certain lift parts 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. 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. 0606141 is taken to have come into force on 10 April 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 for a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders apply a lower rate of customs duty to specified goods, contingent upon meeting specific criteria. One such criterion is that the goods in question should not have any substitutable goods produced in Australia. This instrument addresses the gap where certain imported goods could benefit from reduced tariffs, promoting economic efficiency and fair competition within the market. Tariff Concession Instrument No. 0606141, issued on 30 June 2006, specifically pertains to certain lift parts, providing a zero per cent duty rate instead of the general 5 per cent, given that no equivalent goods were being produced locally. This measure ensures that the rights of importers are preserved and potentially enhanced, allowing them to seek refunds on duties paid prior to the issuance of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0606141 applies to the goods specified in the Instrument, namely certain lift parts, and is subject to the conditions set out in Part XVA of the Customs Act 1901. It applies to any person or entity seeking to import these goods into Australia and thus benefits importers by providing a concessional rate of customs duty. The Instrument extends to the entire Commonwealth of Australia and is effective as of the date the application for the tariff concession was lodged, 10 April 2006. The Instrument operates under the authority conferred by the Customs Act 1901, which mandates the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) provided the application meets the core criteria and does not pertain to goods excluded under section 269SJ of the Act. The TCO does not affect any existing rights of persons other than the Commonwealth and does not impose new liabilities on any person. The application of the TCO can be further refined or extended through subordinate instruments, which may provide additional details or conditions for its operation.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0606141, introduces provisions for the application and establishment of Tariff Concession Orders (TCOs) (section 269C). A TCO allows for a reduced rate of customs duty on certain goods. To be eligible for a TCO, an application must be made to the Chief Executive Officer of Customs (CEO) under section 269F, and it must not concern goods specified in section 269SJ, which are ineligible for TCOs. The CEO evaluates whether the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the date of application (section 269C).
For a TCO to be granted, the CEO must be satisfied that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business (section 269C). Once satisfied, the CEO must issue a written order (section 269P(3)) that specifies the goods subject to the TCO and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) that applies. This order effectively reduces the duty rate on the specified goods. In the case of TCO No. 0606141, certain lift parts are subject to a zero per cent duty rate, down from the general rate of 5 per cent.
The obligations imposed by the Act on the CEO include ensuring that applications for TCOs are assessed against the core criteria, publishing notices in the Gazette to invite submissions from interested parties, and making a decision based on the application and any submissions received (subsection 269K(1)). In this instance, no submissions were received in response to the published notice. The TCO also mandates that the rights of individuals are not adversely affected by the concession, and it does not impose new liabilities on any person.
Breaches of the provisions under the Customs Act 1901, including those related to TCOs, can lead to various civil or criminal consequences. While specific penalties are not detailed in the explanatory statement, breaches generally attract penalties as outlined in the relevant sections of the Customs Act and the Customs Regulations 1993. Such penalties can include fines and, in more severe cases, imprisonment. The exact nature and severity of the penalties depend on the specific breach and the discretion of the court.