EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701960
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.
Gyrotonic Melbourne Equipment Sales applied for a TCO in respect of certain pulley tower exercisers on 7 February 2007.
Instrument
TCO No 0701960 was made on 30 April 2007. It declares that those certain pulley tower exercisers 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. 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. 0701960 is taken to have come into force on 7 February 2007.
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. 0701960 was enacted in 2007 under the Customs Act 1901 to address the need for tariff concessions on specific goods. This instrument was developed to facilitate tariff reductions for imported goods that do not have substitutable products produced in Australia, thereby encouraging imports and potentially reducing costs for consumers and businesses. The instrument was enacted by the Chief Executive Officer of Customs, who assessed the application from Gyrotonic Melbourne Equipment Sales for a tariff concession on certain pulley tower exercisers, ultimately determining that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession. The policy objective behind this instrument was to provide a streamlined process for tariff reductions while ensuring that the rights of existing stakeholders were not adversely affected.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) to certain goods, facilitating lower rates of customs duty under specific conditions. The Act applies to any person or entity that seeks to import goods eligible for a TCO, which are determined based on the absence of substitutable goods produced in Australia at the time of application. The Act’s provisions extend to the Chief Executive Officer of Customs, who is responsible for deciding whether to grant a TCO based on the core criteria outlined in the Act. Geographically, the application of the Act is national in scope, administered under the Commonwealth jurisdiction. The Act explicitly excludes certain goods from being subject to a TCO as per section 269SJ. The application of the Act can be further detailed through subordinate instruments, which may specify additional criteria or conditions for particular industries or types of goods.
Key Provisions
The Tariff Concession Instrument No. 0701960 primarily involves the granting of tariff concessions on certain goods, specifically pulley tower exercisers, under section 269F (1) of the Customs Act 1901. The instrument, which came into force on 7 February 2007, declares that these goods are subject to a zero percent duty rate, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995, provided that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). This effectively reduces the duty on these goods from a general rate of 5% to 0%, thereby benefiting importers who can apply for a refund of duty on goods imported since the date the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
Entities and individuals affected by this legislation must ensure compliance with the conditions set forth in the TCO. This includes verifying that the goods in question are indeed the specific type of pulley tower exercisers described and that no substitutable goods were produced in Australia on the application date. Importers, in particular, should be aware that they can apply for a refund of duty on goods imported since the TCO is taken to have come into force. There are no liabilities imposed on any person by this TCO, and it does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities in respect of anything done or omitted to be done before the date of registration.
The Customs Act 1901 outlines potential offences and penalties for breaches of its provisions. However, the explanatory statement for this particular TCO does not specify any offences, penalties, or consequences for non-compliance with the terms of this TCO. It is essential for those governed by this Act to remain informed about any relevant updates or changes to the legislation to avoid any potential breaches. While specific penalties are not mentioned in this context, general penalties under the Customs Act 1901 can include fines and imprisonment for serious breaches, emphasising the importance of adherence to the Act's requirements.