EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704150
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 suspension rope grippers on 20 March 2007.
Instrument
TCO No 0704150 was made on 08 June 2007. It declares that those certain elevator suspension rope grippers 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. 0704150 is taken to have come into force on 20 March 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. 0704150 was enacted in 2007 under the Customs Act 1901 to facilitate tariff concessions for certain goods, specifically elevator suspension rope grippers in this instance. The instrument was introduced to address the need for a streamlined process through which businesses could apply for and receive tariff reductions on imported goods, provided that these goods are not produced in Australia and there are no suitable domestic substitutes. The instrument was enacted by the Chief Executive Officer of Customs as per the legislative framework provided by the Customs Act, with a clear policy objective to enhance trade efficiency and economic competitiveness by reducing customs duty on specific imported goods.
The instrument was designed to ensure that no Australian producer is disadvantaged, and it provides a pathway for importers to claim refunds on duties paid on these goods since the effective date of the tariff concession. This measure aligns with broader economic policies aimed at promoting fair trade practices and supporting Australian businesses by preventing undue competition from imported goods that are not locally produced.
Scope and Application
The Tariff Concession Instrument No. 0704150, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain elevator suspension rope grippers. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions on goods that are not produced in Australia and for which there are no substitutable goods produced domestically. The instrument aims to benefit importers by providing them with the opportunity to apply for a refund of duty on goods imported since the TCO is taken to have come into force. The scope of this Act is limited to the application for tariff concession orders, ensuring that the rights of any person are not adversely affected by the TCO as long as actions were taken before the date of registration. The TCO does not impose any liabilities on any person. The instrument has a national jurisdictional reach as it is a Commonwealth Act. Subordinate instruments may extend or further define the application of the Act.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0704150 under the Customs Act 1901 (section 269P) require the Chief Executive Officer of Customs (CEO) to make a written order, known as a Tariff Concession Order (TCO), when an application is deemed to meet the core criteria. The CEO must ensure that the goods in question are not substitutable goods produced in Australia (section 269C), which means that if no such goods are being produced, the application is likely to be approved. If the CEO is satisfied that these criteria are met, they must declare the goods subject to the TCO, applying a specified item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes specific obligations on the parties involved, particularly the applicant. The applicant must submit a valid application to the CEO for a TCO, ensuring it does not pertain to goods specified in section 269SJ of the Act, which cannot be subject to a TCO (section 269F). The CEO, on receiving the application, must evaluate whether the goods are not substitutable and meet the core criteria, as outlined in section 269C. Additionally, the CEO has a duty to publish a notice in the Gazette inviting any interested parties to submit their views on the proposed TCO (section 269K(1)). Once the CEO issues the TCO, it is deemed to have come into effect on the date the application was lodged (section 269S(1)).
Breaches of the provisions within the Customs Act 1901, including improper applications or misrepresentations in the application process, can lead to civil or criminal consequences. While the specific offences and penalties are not detailed in the explanatory statement, under Australian law, breaches of customs regulations can result in significant penalties. For example, under section 225 of the Customs Act, false statements or acts made to obtain a concession can lead to fines or imprisonment. The maximum penalties for such offences can vary, but they may include fines of up to $22,200 or imprisonment for up to two years, or both, depending on the severity of the offence. Additionally, failure to comply with TCO provisions could result in the imposition of duties on the goods, which might lead to financial penalties or legal action against the non-compliant party.