EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707215
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.
GMCAT Pty Ltd applied for a TCO in respect of certain walk behind lawn mowers on 15 May 2007.
Instrument
TCO No 0707215 was made on 23 July 2007. It declares that those certain walk behind lawn mowers 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. 0707215 is taken to have come into force on 15 May 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 was enacted by the Australian Parliament to regulate the import and export of goods, including the imposition of customs duties. One of its purposes is to allow the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on specific goods, provided certain criteria are met. The act was introduced to address the need for a flexible mechanism to adjust customs duties in response to economic and trade policy considerations. Instrument F2007L02510, made under the Customs Act, is a Tariff Concession Order (TCO) issued on 23 July 2007. It grants a tariff concession to certain walk behind lawn mowers, reducing the duty from the general rate of 5% to free. This was made possible under section 269C of the Act, which requires that no substitutable goods were produced in Australia at the time of the application. The instrument aims to ensure that the concession does not disadvantage any person other than the Commonwealth and allows importers to apply for duty refunds on eligible goods imported since 15 May 2007.
Scope and Application
The Tariff Concession Instrument No. 0707215, under the Customs Act 1901, applies to specific goods, namely certain walk behind lawn mowers, and the application of a lower rate of customs duty on these goods. This concession is granted through a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO) when an application is made and the core criteria are met, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The application of this TCO is confined to the Commonwealth jurisdiction and does not extend to any state or territory legislation. The TCO does not disadvantage any person, including importers, by affecting their rights as they stood on the date of registration, and it does not impose any liabilities on any person other than the Commonwealth. The rights of importers are positively affected as they may apply for a refund of duty on goods imported since the effective date of the TCO. The instrument does not introduce any exclusions or exemptions beyond those stipulated in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The instrument may be further extended or restricted through subordinate instruments, although this specific TCO does not outline any additional measures.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0707215, are sections 269C, 269P, and 269S of the Customs Act 1901 (the Act). Section 269C defines the core criteria that an application for a Tariff Concession Order (TCO) must meet, primarily focusing on the non-existence of substitutable goods produced in Australia. Section 269P details the process for the Chief Executive Officer of Customs (CEO) to make a written TCO once the application meets the core criteria, while section 269S outlines the commencement date for the TCO, which is the day the application is lodged. This TCO applies to certain walk-behind lawn mowers, granting them a lower customs duty rate of free, down from the general rate of 5%.
The obligations imposed on parties by this legislation are primarily on the CEO of Customs, who must determine if the TCO application meets the core criteria outlined in section 269C. If the CEO is satisfied that the application is valid and meets these criteria, they must make a TCO as stipulated in section 269P. Additionally, the CEO must publish a notice in the Gazette, inviting any person who may object to the TCO to lodge a submission with the CEO, as per subsection 269K(1) of the Act. In this case, the CEO did not receive any objections. Importers, once the TCO is registered, can benefit by applying for a refund of duty on goods imported since the effective date of the TCO.
Any breach of the obligations under this Act can result in civil or criminal penalties, although the specific penalties are not detailed within the text provided. Generally, breaches of the Customs Act 1901 can result in substantial fines or imprisonment, depending on the severity of the offence. For example, under section 236 of the Act, knowingly or recklessly making a false statement in a document related to customs can attract a fine of up to 10,000 penalty units or imprisonment for up to two years, or both. However, for this particular TCO, no specific breaches or penalties are mentioned, and it is assumed that compliance with the Act's requirements will maintain the integrity of the tariff concession scheme.