EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619994
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 counterbalanced forklifts on 20 December 2006.
Instrument
TCO No 0619994 was made on 16 March 2007. It declares that those certain counterbalanced forklifts 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. 0619994 is taken to have come into force on 20 December 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 Commonwealth Parliament, establishes a framework for the administration of customs and excise in Australia. It includes provisions for the creation of Tariff Concession Orders (TCOs) to provide tariff relief for specific goods. The Customs Act 1901 (Part XVA) allows the Chief Executive Officer of Customs to grant TCOs to applicants on the condition that no substitutable goods are produced in Australia. The purpose of Tariff Concession Instrument No. 0619994, made in 2007, was to respond to an application from Powerlift Australia Pty Ltd for a TCO on certain counterbalanced forklifts. The instrument was made because no substitutable goods were being produced in Australia, thus meeting the core criteria outlined in the Customs Act 1901. The instrument declares that the goods in question are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a zero duty rate for these goods, which contrasts with the general 5% duty rate. The instrument does not affect the rights of any person adversely, and importers of these goods can apply for a refund of duty paid since the TCO's effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders pertain to goods for which a lower rate of customs duty is applicable. An individual or entity can apply to the CEO for a TCO if the goods in question do not fall under the category of items specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO is obligated to consider the application if it meets the core criteria, primarily that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This decision-making process involves interpreting the terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" as defined in the Act. Upon satisfying these criteria, the CEO issues a written TCO, as exemplified by TCO No. 0619994, which grants free customs duty status to certain counterbalanced forklifts, thereby reducing the general rate of duty from 5% to free. The application of this instrument is national in scope, affecting the importation rights of entities within Australia.
Key Provisions
The main provisions of the Customs Act 1901, particularly those relating to Tariff Concession Orders (TCOs) under Part XVA, establish a framework for the Chief Executive Officer of Customs (CEO) to grant tariff concessions on specified goods. Section 269F of the Act allows a person to apply to the CEO for a TCO for certain goods, provided the goods are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business, a TCO is issued. This means that the goods subject to the TCO will attract a lower rate of customs duty, as specified in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the CEO. Upon receiving a TCO application, the CEO must assess whether the application meets the core criteria. If the criteria are met, the CEO must make a written order declaring the goods to which the TCO applies, as stated in section 269P(3). Additionally, as per subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made. In this instance, no submissions were received, allowing the TCO to proceed without opposition.
There are no explicit offences, penalties, or civil/criminal consequences detailed in the explanatory statement for breaches of the TCO provisions. However, if a TCO is issued improperly or if there is a failure to comply with the terms of the TCO, the general legal and administrative consequences might include the potential for the TCO to be revoked, imposition of duties at the higher rate, or financial penalties for any non-compliance related to the concession. The specifics of any penalties would be determined by the applicable customs and tariff laws.