EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615362
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.
Pacific Hoists applied for a TCO in respect of certain motor vehicle winches on 04 October 2006.
Instrument
TCO No 0615362 was made on 15 December 2006. It declares that those certain motor vehicle winches 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. 0615362 is taken to have come into force on 04 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 Tariff Concession Instrument No. 0615362, enacted in 2006 under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods to support Australian businesses and consumers by reducing the cost of imported goods. This instrument was created to facilitate the application process for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, ensuring that when no substitutable goods are produced in Australia, a lower rate of customs duty applies to the goods in question. The instrument was introduced to streamline the process of applying for and granting tariff concessions, thereby promoting fair trade practices and providing economic benefits by making certain imported goods more affordable.
The enactment of this instrument by the relevant legislature aims to address the identified gap in the tariff concession scheme, ensuring that the application process is transparent and accessible. By reducing the customs duty on specific imported goods, the instrument supports policy objectives such as fostering competitive markets and enhancing the efficiency of trade operations. The instrument ensures that importers can benefit from reduced duty rates and potential refunds, while maintaining that no existing rights or liabilities of other parties are adversely affected.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for Tariff Concession Orders (TCOs) which apply to the reduction or exemption of customs duty on certain goods. This Act applies to any person or entity that wishes to apply for a TCO for goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The Act extends to the whole of Australia and is administered at the Commonwealth level. The scope of the Act includes the criteria for a TCO, which must be met to ensure that no substitutable goods are produced in Australia on the day the application is lodged. The Act also outlines the process for publishing notices in the Gazette and the handling of submissions against the proposed TCO. The application and subsequent TCO, once issued, apply retroactively to the date of the application, without affecting any pre-existing rights or imposing liabilities for actions taken before the TCO was registered. Notably, this legislation does not apply to goods specified in section 269SJ, which are explicitly excluded from tariff concessions. The Act's application may be extended or specified further through subordinate instruments, such as regulations, which can provide additional details or conditions for the issuance and effect of TCOs.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0615362 under the Customs Act 1901 (section 269F) require that the Chief Executive Officer of Customs (CEO) consider an application for a Tariff Concession Order (TCO) for certain goods. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO order (section 269P(3)). For this particular instrument (TCO No. 0615362), it specifies that certain motor vehicle winches are subject to a TCO, with the rate of duty being free instead of the general 5% (section 269P(3), Schedule 4, item 50). The TCO came into effect on the day the application was lodged, 04 October 2006 (subsection 269S(1)).
The obligations and requirements imposed by the Act on parties include the necessity for the CEO to ensure that no substitutable goods were produced in Australia when the application was lodged (section 269C). The CEO must also publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). Additionally, the CEO must consider the definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" as provided in sections 269D, 269E, and 269F respectively. For this specific TCO, the CEO satisfied these criteria and no submissions were received, allowing the TCO to proceed.
In terms of offences, penalties, or consequences for breaches, the Act does not explicitly state penalties for failing to meet the core criteria for a TCO application. However, any misuse or non-compliance with the conditions of the TCO could potentially lead to legal repercussions under other relevant sections of the Customs Act or associated regulations. For example, incorrect declarations or fraudulent activities related to customs duties could attract penalties under other sections of the Act, such as section 126 regarding false statements and fraud. The specific penalties for such offences would depend on the nature and severity of the breach but could include fines and imprisonment as stipulated in the general provisions of the Customs Act.