EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617864
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.
Car-O-Liner Pty Ltd applied for a TCO in respect of certain vehicle lifting platforms on 27 October 2006.
Instrument
TCO No 0617864 was made on 12 January 2007. It declares that those certain vehicle lifting platforms 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. 0617864 is taken to have come into force on 27 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. 0617864, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods that are not produced in Australia. The Customs Act 1901, overseen by the Parliament of Australia, establishes a framework within which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The primary objective of this legislation, as stated in the explanatory statement, is to ensure that certain goods receive lower rates of customs duty, thereby encouraging their import and use. Car-O-Liner Pty Ltd's application for a TCO for vehicle lifting platforms exemplifies the process, where the CEO was satisfied that no substitutable goods were produced domestically, meeting the core criteria. The instrument was published in the Gazette, with no objections received, and came into force on the date of application, providing a tariff benefit without imposing liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This process is applicable to any person or entity seeking to import goods that are not produced in Australia and do not have substitutable alternatives, as defined under the Act. The application for a TCO is subject to core criteria, including the absence of Australian production of substitutable goods on the day the application is lodged. Once the CEO determines that an application meets these criteria, a written order is made, effectively applying a lower rate of customs duty or making the goods duty-free, as specified in the Customs Tariff Act 1995. The TCO applies from the date the application is lodged, and it does not affect the rights of any person, except to beneficially affect the rights of importers who may apply for a refund of duty paid on the goods since the effective date of the TCO. Notably, no submissions were received in response to the CEO’s invitation for objections to the TCO, indicating a smooth process without contention regarding the concession granted.
Key Provisions
The key operative sections of the Customs Act 1901, in the context of Tariff Concession Orders (TCOs), are sections 269C, 269F, and 269P (subs 3). Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO for specific goods, while section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P(3) mandates that the CEO must issue a written TCO order.
The Customs Act imposes certain obligations on applicants for TCOs and the CEO. For applicants, the primary obligation is to ensure that their application is not in respect of goods specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The CEO, on the other hand, must promptly publish a notice in the Gazette once an application is accepted as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be granted. In this case, no submissions were received. The CEO must also decide whether the application meets the core criteria, as outlined in section 269C, and issue a written TCO if satisfied.
In terms of penalties and consequences, the Act does not explicitly outline specific penalties for non-compliance with the TCO provisions. However, the Act does provide for various offences and penalties under its general provisions, which could potentially apply in cases of fraud, misrepresentation, or other breaches related to the TCO process. The maximum penalties for such offences can vary widely depending on the nature and severity of the breach, but they could include substantial fines or imprisonment, or both. The Act ensures that the rights of persons (other than the Commonwealth) are not adversely affected by the TCO, and no new liabilities are imposed on any person by the TCO.