EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704197
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.
LinCon Recruitments Pty Ltd applied for a TCO in respect of certain truck mounted platforms on 22 March 2007.
Instrument
TCO No 0704197 was made on 15 June 2007. It declares that those certain truck mounted platforms 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. 0704197 is taken to have come into force on 22 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to reduce the customs duty on specific goods. This Act was designed to address the gap where certain imported goods, which had no locally produced substitutes, faced high customs duties, potentially increasing costs for businesses and consumers. In response to an application from LinCon Recruitments Pty Ltd, Tariff Concession Instrument No. 0704197 was issued on 15 June 2007, applying a zero per cent duty rate on certain truck mounted platforms, effective from the date of the application, 22 March 2007. This measure was taken after satisfying the core criteria that no substitutable goods were produced in Australia in the ordinary course of business. The TCO aims to benefit importers by allowing them to claim refunds on duties paid on these goods since the effective date, without imposing any new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901 provides a framework for the administration of customs duties and includes provisions for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs may reduce or eliminate customs duty on specified goods. These orders apply to goods for which no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. Any person can apply for a TCO, provided the goods in question are not those specified in section 269SJ of the Act as ineligible. The application process requires public notification, allowing interested parties to voice their concerns, although in this instance, no submissions were received. The TCO applies nationally and comes into effect on the date the application is lodged, providing benefits to importers by allowing them to seek refunds on duties paid prior to the TCO's effective date. Importantly, the TCO does not impose any new liabilities and does not affect existing rights as of the registration date. The application and effect of TCOs can be further defined and extended through subordinate instruments, ensuring the scheme remains flexible and responsive to changing economic conditions.
Key Provisions
The Customs Act 1901 establishes a framework within which the Chief Executive Officer (CEO) of Customs can make Tariff Concession Orders (TCOs) under section 269F (1). These orders provide a lower rate of customs duty on certain goods. For example, Tariff Concession Instrument No. 0704197, made on 15 June 2007, applies to certain truck mounted platforms, reducing the duty from the general rate of 5% to free under item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C, and that the application does not relate to goods specified in section 269SJ, which cannot be subject to a TCO.
Obligations under the Act include the requirement for the CEO to decide whether a TCO application meets the core criteria as specified in section 269C. If satisfied, the CEO must make a written order declaring the goods to which the prescribed item of Schedule 4 to the Tariff applies, as outlined in subsection 269P(3). The CEO must also publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as required by subsection 269K(1). Additionally, the TCO does not affect the rights of a person, other than the Commonwealth, as at the date of registration, ensuring that it does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.
Breaches of the provisions of the Customs Act 1901 may lead to civil and criminal consequences. The Act itself does not explicitly state the penalties for non-compliance, but the consequences can include fines and imprisonment for offences under related legislation. The maximum penalties can vary significantly depending on the specific breach and the severity of the contravention. It is important to note that any person who fails to comply with the terms of a TCO or who provides false or misleading information in an application may face legal action, including penalties for fraud or misrepresentation under the Crimes Act 1914.