EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707219
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 push lawn mowers on 15 May 2007.
Instrument
TCO No 0707219 was made on 27 July 2007. It declares that those certain push 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 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. 0707219 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, enacted by the Australian Parliament, provides a framework for the regulation of imports and exports, including the imposition of customs duty on imported goods. To address the need for flexibility and economic considerations in certain trade scenarios, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0707219 was introduced to provide a tariff concession for specific push lawn mowers, effectively reducing the customs duty on these goods from 5% to 0%. This was enacted in response to an application by Gmcat Pty Ltd, which sought the concession on the basis that no substitutable goods were produced in Australia. The Chief Executive Officer of Customs was satisfied with the application and subsequently issued the order on 27 July 2007, which came into effect on the date the application was lodged, 15 May 2007. This measure was intended to benefit importers by potentially allowing them to claim refunds for duties paid on the specified goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0707219 applies to the goods specified in the Instrument, which in this case are certain push lawn mowers, and is a subordinate instrument under the Customs Act 1901. This Act applies to any person or entity seeking tariff concessions for goods imported into Australia, with the scope extending across the Commonwealth. The Act’s application is limited to goods that are not specified in section 269SJ of the Act, which includes goods such as those that are strategic or controlled under other legislative instruments. The application process involves an assessment by the Chief Executive Officer of Customs to determine whether the goods are substitutable by Australian-produced goods. If the core criteria are met, the CEO must issue a Tariff Concession Order (TCO) which provides a lower rate of customs duty. In this instance, the TCO reduced the duty on the specified push lawn mowers from 5% to 0%. The TCO does not affect pre-existing rights or impose new liabilities on individuals or entities other than the Commonwealth and is effective from the date the application was lodged.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0707219, made under the Customs Act 1901, pertain to the application, assessment, and implementation of Tariff Concession Orders (TCOs). Section 269F of the Act allows for the application of a TCO by a person for certain goods. The Chief Executive Officer (CEO) of Customs must then assess whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)). If these criteria are satisfied, the CEO must issue a written order declaring the goods to which the TCO applies. In this instance, item 50 of Schedule 4 to the Customs Tariff Act 1995 applies to the certain push lawn mowers, reducing the duty rate from 5% to 0%.
The obligations imposed by the Act on the parties involved are primarily directed towards the CEO of Customs, who is tasked with the responsibility of evaluating TCO applications. The CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for TCOs. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as required by subsection 269K(1) of the Act. Additionally, the CEO is required to make the TCO effective from the day the application was lodged, as stipulated in subsection 269S(1) of the Act.
Breaches of the provisions within the Customs Act 1901, including the implementation of TCOs, may result in both civil and criminal consequences. However, the explanatory statement does not explicitly detail the penalties for non-compliance with the TCO requirements. It is essential to refer to the broader Customs Act 1901 and associated regulations for comprehensive information on penalties. Typically, the Act may impose fines or other penalties for non-compliance, and in severe cases, criminal charges may be applicable. The exact penalties would depend on the nature and severity of the breach.