EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616285
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.
Powerlift Australia Pty Ltd applied for a TCO in respect of certain forklift parts on 31 August 2006.
Instrument
TCO No 0616285 was made on 22 December 2006. 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. One submission objecting to the TCO application was received from Crown Equipment Pty Ltd.
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. 0616285 is taken to have come into force on 31 August 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. 0616285 was enacted in 2006 under the Customs Act 1901, aiming to address the issue of customs duty on specific imported goods by providing tariff concessions. The instrument was introduced to facilitate lower rates of customs duty on certain goods, thereby potentially lowering costs for importers and businesses that rely on these goods. This initiative was in response to an application by Powerlift Australia Pty Ltd for tariff concessions on particular forklift parts, which was granted after it was established that no substitutable goods were produced in Australia. The process involved scrutiny by the Chief Executive Officer of Customs, who assessed the application against the core criteria set out in the Act. The policy objective is to ensure that tariff concessions are granted fairly and only when they do not disadvantage domestic producers or existing obligations. The instrument does not affect the rights of persons, other than the Commonwealth, in a way that would impose liabilities or disadvantages for actions taken before the tariff concession came into effect.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs), which are mechanisms to reduce the customs duty on certain goods. Specifically, the Act applies to individuals and entities who can apply for a TCO under section 269F, provided that the goods in question do not fall under the prohibited list outlined in section 269SJ. The core criteria for a TCO, as outlined in section 269C, necessitate that no substitutable goods are produced in Australia in the ordinary course of business. The Act also mandates that the Chief Executive Officer of Customs must publish a notice in the Gazette inviting objections to a TCO application, as per subsection 269K(1). Once a TCO is made, it applies retroactively to the date the application was lodged, under subsection 269S(1), and benefits importers by allowing them to apply for a refund of duty on goods imported since that date, as stipulated under paragraph 126(1)(r) of the Regulations. The scope of this legislation is national, operating under the Commonwealth, and it does not disadvantage or impose liabilities on any person other than the Commonwealth.
Key Provisions
The primary sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269S, and 269P. Section 269F enables an application for a TCO to be made to the Chief Executive Officer (CEO) of Customs. If the CEO is satisfied that the application is valid and meets the core criteria, as outlined in section 269C, a TCO will be issued. Section 269P requires the CEO to issue a written order if the application meets the criteria, and section 269S details the goods that cannot be subject to a TCO. The explanatory statement mentions that Powerlift Australia Pty Ltd applied for a TCO on forklift parts, and the CEO issued TCO No. 0616285 on 22 December 2006, declaring that the specified forklift parts are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of 0%.
The Act imposes several obligations on parties and entities it governs. An applicant, such as Powerlift Australia Pty Ltd, must ensure their application meets the core criteria, which include demonstrating that no substitutable goods are produced in Australia on the day the application was lodged. The CEO is required to assess the application and, if satisfied, issue a TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, as per section 269K(1) of the Act. Once a TCO is issued, importers can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 provides for potential civil and criminal consequences for breaches. While specific penalties are not detailed in the explanatory statement, breaches of customs regulations generally attract penalties under the Crimes Act 1914. Civil penalties may include fines, and in more serious cases, criminal penalties could apply, resulting in imprisonment. The exact penalties would depend on the nature and severity of the breach, as determined by the relevant authorities.