EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609407
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 Pty Ltd applied for a TCO in respect of certain elevator and/or lift parts on 31 May 2006.
Instrument
TCO No 0609407 was made on 11 August 2006. It declares that those certain elevator and/or 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 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. 0609407 is taken to have come into force on 31 May 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 enacted to facilitate and regulate international trade by imposing duties on imported goods and administering the collection of these duties. A significant part of the Act, specifically Part XVA, addresses the scheme for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on certain goods under specific conditions. This scheme was introduced to address the problem of ensuring fair trade practices by preventing the circumvention of customs duties through the substitution of locally produced goods for imported ones. The Tariff Concession Instrument No. 0609407, enacted in 2006, exemplifies this legislative intent by providing a concession for certain elevator and/or lift parts, which were subject to a reduced duty rate following an application by Eastern Elevators Pty Ltd. The instrument was developed in accordance with the policy objective of the Customs Act to facilitate trade while ensuring the appropriate collection of duties, thereby maintaining a balance between fostering economic growth and protecting domestic industries.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, providing lower customs duty rates on specified goods. The legislation applies to any person or entity that submits an application for a TCO, ensuring that the goods in question are not listed in section 269SJ, which includes those that cannot be subject to a TCO. The Act’s scope extends to the entire Commonwealth of Australia, with TCOs impacting the duty rates on goods specified in the instrument. Exclusions and exemptions are clearly outlined, particularly in section 269SJ, which lists goods that cannot be subject to a TCO. The Act also allows for the extension or restriction of application through subordinate instruments, ensuring flexibility in its implementation. The geographic reach of this legislation is nationwide, as it operates under the overarching authority of the Commonwealth. The Explanatory Statement clarifies that the TCO, once issued, applies retroactively from the date the application was lodged, enhancing its practical effect while safeguarding the rights of existing parties not to be disadvantaged by its implementation.
Key Provisions
The key operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269S, and 269P. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for certain goods. If the CEO determines that the application meets the core criteria, as outlined in section 269C, and that the goods are not specified in section 269SJ, they must issue a written TCO (section 269P). The TCO provides a lower rate of customs duty for the specified goods. For instance, in TCO No. 0609407, certain elevator and/or lift parts benefit from a free rate of duty instead of the general rate of 5%.
The Act imposes specific obligations on the parties involved in the TCO process. The CEO must assess whether an application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties after accepting a valid TCO application (subsection 269K(1)). If no submissions are received, the CEO can proceed to issue the TCO. Importantly, the TCO does not affect any existing rights or liabilities as of the application date, thereby protecting the rights of other parties and ensuring that no new liabilities are imposed (subsection 269S(1)).
Under the Customs Act 1901, breaches of the conditions set forth in a TCO or any related provisions could result in civil or criminal consequences. However, the specific offences, penalties, or consequences are not detailed in the provided explanatory statement. Typically, such breaches could lead to fines, imprisonment, or both, depending on the severity of the violation. The maximum penalties would be determined by the relevant courts based on the specific circumstances of each case and any applicable laws. It is crucial for entities and individuals involved in the import and export of goods to comply with the terms of the TCO and the broader provisions of the Customs Act to avoid such penalties.