EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611594
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 10 July 2006.
Instrument
TCO No 0611594 was made on 22 September 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. 0611594 is taken to have come into force on 10 July 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. Specifically, Part XVA of the Act facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which allow for lower customs duties on certain imported goods. This scheme addresses the problem of ensuring that certain imported goods are competitively priced in the Australian market, thereby promoting economic efficiency and fairness. The Tariff Concession Instrument No. 0611594, made in 2006, is an example of this process in action. It was introduced in response to an application from Eastern Elevators Pty Ltd for tariff concessions on specific elevator and/or lift parts, and was implemented when the CEO was satisfied that no substitutable goods were produced in Australia. The policy objective is to ensure that the application of tariff concessions does not disadvantage existing Australian producers and allows for a refund of duties for importers of the affected goods.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the Chief Executive Officer of Customs (the CEO) to grant Tariff Concession Orders (TCOs) that lower the rate of customs duty on certain goods. This scheme is particularly relevant to businesses and individuals who import goods that are not produced domestically, ensuring they are not subjected to higher duties when comparable goods are not manufactured within Australia. A TCO application must meet the core criteria, which includes the absence of substitutable goods produced in Australia in the ordinary course of business. For instance, Eastern Elevators Pty Ltd successfully applied for a TCO on certain elevator and lift parts, resulting in Instrument TCO No 0611594, which lowered the duty on these parts to free from the general rate of 5%. The legislation mandates that the CEO must publish a notice in the Gazette inviting objections to the TCO, though no submissions were received in this instance. Importantly, a TCO does not retroactively disadvantage non-Commonwealth entities or impose liabilities for actions taken prior to its registration. Instead, it prospectively benefits importers by potentially allowing them to claim refunds on duties paid before the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0611594, issued under the Customs Act 1901, allows for the application of a reduced customs duty rate for certain goods, specifically elevator and/or lift parts in this case (s 269C). The instrument was made following an application by Eastern Elevators Pty Ltd on 10 July 2006, and the concession was granted on 22 September 2006 (s 269P(3)). This means that the goods in question now benefit from a zero per cent duty rate instead of the general rate of five per cent (Schedule 4, Tariff).
The Act imposes certain conditions for the approval of a Tariff Concession Order (TCO), including the requirement that no substitutable goods are produced in Australia on the day the application is lodged (s 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the application (s 269K(1)). In this instance, no submissions were received, facilitating the approval process. The TCO is effective from the date the application was made, meaning that the duty concession applies retroactively from 10 July 2006 (s 269S(1)).
Entities governed by the Customs Act 1901, particularly applicants for TCOs, must ensure that their applications meet the specified criteria and provide all necessary information to satisfy the CEO of the validity of the application. Applicants must demonstrate that no substitutable goods are produced in Australia on the day of application. Furthermore, the CEO is required to consider any submissions received in response to the Gazette notice and make a decision based on the merits of the application and any submissions.
Failure to comply with the provisions of the Customs Act 1901 or any associated regulations could result in legal consequences. While the specific offences and penalties are not detailed in the explanatory statement, breaches of the Act could potentially lead to civil or criminal penalties, depending on the nature and severity of the breach. The maximum penalties for offences under the Customs Act 1901 can vary significantly and may include substantial fines and/or imprisonment, reflecting the importance of adherence to the legislative requirements.