EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0614974
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.
Apex Associates Pty Ltd applied for a TCO in respect of certain forklift parts on 30 October 2006.
Instrument
TCO No 0614974 was made on 19 January 2007. It declares that those certain forklift 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. 0614974 is taken to have come into force on 30 October 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, establishes a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0614974, issued in 2007, was introduced to address the issue of providing tariff concessions for specific goods where no substitutable goods are produced in Australia. This was achieved by allowing the CEO to apply a lower rate of customs duty on goods that meet certain criteria, thereby facilitating trade and potentially lowering costs for importers. The policy objective of this instrument is to ensure that imports are not unduly burdened by customs duties when suitable alternatives are not locally produced.
Scope and Application
The Customs Act 1901 applies to individuals and entities engaged in the importation of goods into Australia. The Act provides a framework for the imposition of customs duties and the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation allows for the application of lower rates of customs duty on certain goods, contingent on specific criteria being met. For instance, Apex Associates Pty Ltd applied for and was granted a TCO for certain forklift parts, resulting in a reduction of duty from 5% to 0%. The geographic reach of the Act is national, applying to all states and territories within Australia. However, the Act excludes certain goods from being subject to a TCO as specified in section 269SJ. The CEO must ensure that no substitutable goods are produced in Australia in the ordinary course of business before issuing a TCO, as outlined in section 269C. The Act also mandates that the CEO publish a notice in the Gazette inviting submissions against the TCO application, although in this case, no submissions were received. The TCO is effective from the date the application was lodged, and it does not affect the rights of any person other than the Commonwealth regarding actions taken prior to its registration. The rights of importers are positively impacted, allowing them to apply for duty refunds on imports from the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0614974 pertain to the conditions under which a Tariff Concession Order (TCO) can be made by the Chief Executive Officer (CEO) of Customs (sections 269C, 269F, 269K, and 269P). Specifically, section 269F allows an application for a TCO in respect of goods, provided the goods are not specified in section 269SJ. If the application meets the core criteria, namely that no substitutable goods were produced in Australia on the day the application was lodged (section 269C), the CEO must make a written order declaring the goods to which a specified tariff applies (section 269P).
The Act imposes several obligations on the parties involved. For the CEO of Customs, the key obligation is to assess whether the application for a TCO meets the core criteria as outlined in section 269C. If the application is deemed valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections (section 269K). For applicants, such as Apex Associates Pty Ltd, the obligation is to ensure their application is made in compliance with the provisions of the Customs Act 1901 and any relevant regulations. Additionally, the CEO must consider any submissions received and make a decision based on the information provided.
The legislation includes provisions for potential breaches and the associated consequences. Although the explanatory statement does not explicitly list offences or penalties for non-compliance, breaches of the Customs Act 1901 can generally lead to civil and criminal penalties. Under the Customs Act, unauthorised importation of goods or incorrect declaration of goods can result in financial penalties. In severe cases, criminal prosecution may ensue, with potential penalties including fines and imprisonment. However, the specific penalties would be determined in accordance with the broader provisions of the Customs Act and any applicable regulations.