EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618705
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.
Kone Elevators Pty Ltd applied for a TCO in respect of certain elevator winches on 21 November 2006.
Instrument
TCO No 0618705 was made on 09 February 2007. It declares that those certain elevator 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. 0618705 is taken to have come into force on 21 November 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, provides a framework for the regulation of customs and excise in Australia. This Act was introduced to address the need for streamlined processes and concessions in the importation of goods, ensuring that Australian businesses and consumers can access goods at reduced costs where appropriate. One of the mechanisms established under this Act is the Tariff Concession Order (TCO) scheme, which allows for the reduction of customs duty on specified goods under certain conditions. Instrument No. 0618705, made under this scheme, was introduced to provide tariff concessions for certain elevator winches, recognising the absence of substitutable goods produced in Australia and thus granting a duty-free status to these imports, effective from 21 November 2006. The policy objective of this instrument is to benefit importers by reducing the duty burden on these specific goods.
Scope and Application
The Customs Act 1901 applies to the regulation of customs duties and the administration of the Customs Tariff Act 1995, with a specific focus on the concession of tariffs for certain goods. Part XVA of the Customs Act establishes a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, providing a lower rate of customs duty for specified goods. This Act applies to any person or entity that imports goods subject to a TCO, with the geographic scope encompassing the Commonwealth of Australia. The Act includes provisions for the application and assessment of TCOs, ensuring that such orders are made in accordance with the criteria set out in the Act, particularly concerning the production of substitutable goods in Australia. Exclusions apply to goods listed in section 269SJ, which cannot be subject to a TCO. The application of this Act can be further extended or modified through subordinate instruments, allowing for detailed regulation and administration of tariff concessions.
Key Provisions
The main operative sections of this legislation, namely the Customs Act 1901, establish the framework for the creation and implementation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, which can lead to a lower rate of customs duty on certain goods if the CEO determines that the application meets the core criteria (section 269C). If the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C), they must make a written order declaring that the goods in question are subject to a specific item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The Customs Act 1901 imposes several obligations on the parties involved. Firstly, the CEO must ensure that any TCO application does not pertain to goods specified in section 269SJ of the Act, which cannot be subject to a TCO (section 269F). Upon accepting a valid application, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must also determine whether the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the core criteria are met, the CEO is required to make a written TCO (section 269P(3)).
In terms of potential breaches, the Customs Act 1901 does not explicitly outline specific offences, penalties, or civil/criminal consequences for non-compliance with TCO provisions. However, the broader framework of the Act implies that failure to comply with customs regulations, including those related to TCOs, could result in penalties under other sections of the Act. These could include fines or other sanctions for non-compliance with customs duties and related obligations. It is important to note that the specific consequences for non-compliance would depend on the broader context of the Act and applicable regulations.
The Tariff Concession Order No. 0618705, made on 9 February 2007, specifically applies to certain elevator winches. The CEO determined that these goods qualified for a TCO because no substitutable goods were produced in Australia. This order specifies that the general rate of duty on these goods is 5%, but the rate for the goods subject to the TCO is free. The order came into force on 21 November 2006, the day the application was lodged (subsection 269S(1)). This TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose any liabilities on any person. Importers of these goods can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).