EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701895
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.
Crown Equipment Pty Ltd applied for a TCO in respect of certain forklift trucks on 2 August 2002.
Instrument
TCO No 0701895 was made on 8 February 2007. It declares that those certain forklift trucks 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. 0701895 is taken to have come into force on 2 August 2002.
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 Parliament of Australia, provides a framework for the regulation of customs and excise duties, among other things. The Act was introduced to address the need for a structured system governing the importation and exportation of goods, ensuring the collection of necessary duties and the regulation of trade. One notable aspect of the Act is the establishment of Tariff Concession Orders (TCOs) under Part XVA, which allow for the application of lower rates of customs duty on specified goods, provided certain criteria are met. This legislative instrument aims to facilitate trade by reducing the financial burden on importers and encouraging the importation of goods that are not produced domestically.
The Tariff Concession Instrument No. 0701895, made in 2007, exemplifies the application of this legislative framework. In this instance, the Chief Executive Officer of Customs granted a TCO to Crown Equipment Pty Ltd for certain forklift trucks, effectively reducing the duty rate from 5% to 0%. The decision to grant the TCO followed a process that included public consultation, as required by the Act, and the instrument came into effect from the date of the initial application, 2 August 2002. This case underscores the Act's objective to balance the interests of trade facilitation with the need to collect necessary revenue and regulate imports effectively.
Scope and Application
The Tariff Concession Instrument No. 0701895, made under the Customs Act 1901, applies to certain forklift trucks as specified in the instrument, reducing the duty from the general rate of 5% to 0%. This concession is applicable to goods that are subject to the conditions outlined in the instrument, and the application of the concession is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia in the ordinary course of business. The instrument was made on 8 February 2007, and it is effective from 2 August 2002, the date the application was lodged. The concession does not affect any rights or impose any liabilities on persons other than the Commonwealth, and it benefits importers by allowing them to apply for a refund of duty paid on the specified goods since the effective date of the concession. Any person considering an objection to the concession can lodge a submission with the CEO, as required by the Act, and Crown Equipment Pty Ltd submitted an objection in this instance. The scope of the concession is national, extending across all jurisdictions within Australia, and operates under the overarching framework of the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The Customs Act 1901, particularly Part XVA, sets the legal framework for Tariff Concession Orders (TCOs), which allow for a reduction in the rate of customs duty on certain goods (section 269F). When a person applies for a TCO, the Chief Executive Officer of Customs (CEO) must determine whether the application meets the core criteria outlined in sections 269C and 269B, which involve considerations of substitutable goods and their production in Australia. If the CEO is satisfied that the application meets these criteria, they are mandated to issue a written TCO, as specified in section 269P(3).
The obligations under this Act are multifaceted. An applicant must ensure that their application is not for goods specified in section 269SJ, which are ineligible for a TCO. The CEO has the responsibility to verify that the application meets the core criteria, including the absence of substitutable goods produced in Australia on the date of application. Additionally, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO, as stipulated in subsection 269K(1).
Breach of the provisions outlined in the Customs Act 1901 may result in various penalties. However, specific offences and penalties are not explicitly detailed in the text. The general implication is that any failure to adhere to the prescribed procedures or misrepresentation in an application could lead to legal consequences, though the exact nature of these consequences is not provided in the explanatory statement. It is clear that the rights of importers will be beneficially affected if the TCO is granted, as they can apply for a refund of duty on goods imported since the TCO was deemed to have come into force.
The instrument, TCO No. 0701895, was made on 8 February 2007, declaring certain forklift trucks to be subject to a 0% duty rate, down from the general rate of 5%. This TCO was issued following Crown Equipment Pty Ltd's application on 2 August 2002, which was accepted as a valid application by the CEO. The TCO is effective from the date of the application, without affecting any existing rights or imposing new liabilities on anyone other than the Commonwealth. Importers of these goods can now apply for a refund of duty from the date the TCO was deemed to have come into force.