EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610332
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.
Inlon Pty Ltd applied for a TCO in respect of certain reach mowers on 14 June 2006.
Instrument
TCO No 0610332 was made on 01 September 2006. It declares that those certain reach mowers 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. 0610332 is taken to have come into force on 14 June 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 Parliament of Australia, provides a framework for the administration of customs and excise duties, including the establishment of a scheme for Tariff Concession Orders (TCOs). This scheme was introduced to address the need for tariff relief on certain imported goods where no domestic alternatives are produced in Australia. The Tariff Concession Instrument No. 0610332, issued in 2006, is an example of this scheme in action, where the Chief Executive Officer of Customs granted a TCO to Inlon Pty Ltd for certain reach mowers. This TCO was made effective from the date of the application, 14 June 2006, and provides for a reduction in the duty rate from 5% to free, benefiting importers of these goods. The process for issuing a TCO includes a requirement for public consultation, although in this instance, no submissions were received. This instrument ensures that the rights of importers are protected and that no new liabilities are imposed on them as a result of the concession.
Scope and Application
The Tariff Concession Instrument No. 0610332, issued under the Customs Act 1901, applies specifically to certain reach mowers as defined in the instrument, granting them tariff concessions by exempting them from the general customs duty rate of 5%. This instrument is applicable to any person or entity that imports these specified reach mowers into Australia. The instrument aims to provide relief to importers of these goods, thereby facilitating the importation process and potentially reducing costs. The geographical scope of this instrument is limited to Australia, and it does not extend beyond federal jurisdiction. No exclusions, exemptions, or thresholds are explicitly stated in the instrument itself, though the application process under the Customs Act 1901 includes provisions for assessing whether the goods qualify for a tariff concession order. The application of this tariff concession order can be extended or refined through subordinate instruments made under the authority of the Customs Act 1901.
Key Provisions
The Customs Act 1901 (the Act) allows the Chief Executive Officer of Customs (the CEO) to create Tariff Concession Orders (TCOs) which reduce the customs duty on certain goods, as outlined in section 269F. For a TCO to be issued, the goods in question must not be specified in section 269SJ of the Act and must meet the core criteria, primarily that no substitutable goods are produced in Australia as per section 269C. If the CEO is satisfied that these criteria are met, they must issue a written order (section 269P(3)). For instance, Inlon Pty Ltd successfully applied for a TCO for certain reach mowers on 14 June 2006, which was issued on 1 September 2006. This TCO applied item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively reducing the duty on these mowers from 5% to free.
The Act imposes certain obligations on the CEO when handling TCO applications. As per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties once an application is deemed valid. In the case of the TCO for reach mowers, the CEO did not receive any submissions opposing the order. Additionally, the Act specifies that the rights of persons, other than the Commonwealth, are not to be adversely affected by the TCO, as long as their rights are not prejudiced by the order, as outlined in section 269S(1).
Breaches of the requirements set forth in the Customs Act 1901 may result in various penalties. While the Explanatory Statement does not detail specific penalties for failing to comply with the TCO provisions, it is reasonable to infer that non-compliance could lead to civil or criminal consequences, depending on the nature and severity of the breach. The Act provides for general penalties for breaches of customs laws, which can include fines and imprisonment, but the specific penalties for non-compliance with TCO provisions would be determined by the applicable sections of the Act and the circumstances of the breach.