EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708647
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.
Bullivants Pty Limited applied for a TCO in respect of certain elevator ropes on 06 June 2007.
Instrument
TCO No 0708647 was made on 17 August 2007. It declares that those certain elevator ropes 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. 0708647 is taken to have come into force on 06 June 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 administering customs and excise duties, including the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). The 2007 Tariff Concession Instrument No. 0708647 was introduced to address the specific need to reduce the customs duty on certain elevator ropes, which were found not to have substitutable goods produced in Australia. The primary policy objective was to ensure that these goods, which are essential for various industrial applications, are accessible at a reduced cost without imposing any undue burden or disadvantage to the Commonwealth or any other person, thus facilitating trade and industry growth. The instrument came into force on the date the application was lodged, ensuring timely benefit to the importer and compliance with the Act's stipulations.
Scope and Application
The Customs Act 1901, specifically through Part XVA, outlines the framework for Tariff Concession Orders (TCOs) which are implemented to provide reduced rates of customs duty on certain goods. The Act applies to any person or entity that wishes to apply for a TCO for goods they intend to import into Australia, provided that the goods do not fall under the restricted category specified in section 269SJ of the Act. The application process involves submitting a request to the Chief Executive Officer of Customs, who assesses whether the application meets the core criteria set out in section 269C of the Act. This includes verifying that no substitutable goods, as defined in section 269D, are produced in Australia in the ordinary course of business. Once the CEO determines that the application meets the criteria, they are required to issue a TCO, which then applies the prescribed tariff item from Schedule 4 of the Customs Tariff Act 1995 to the specified goods, resulting in tariff concessions. The TCO mechanism operates on a national level, affecting all relevant imports into Australia. The commencement of a TCO is effective from the date of the application, as stipulated in subsection 269S(1) of the Act, and does not retroactively affect any transactions or impose liabilities on persons other than the Commonwealth. Furthermore, the CEO is mandated by subsection 269K(1) to invite public submissions regarding a TCO application, although in the case of TCO No. 0708647, no objections were received.
Key Provisions
The Tariff Concession Instrument No. 0708647, issued under section 269F of the Customs Act 1901, pertains to a concession on customs duty for certain elevator ropes. According to section 269C, the Chief Executive Officer of Customs (CEO) must consider the core criteria before granting a Tariff Concession Order (TCO). Specifically, section 269P(3) stipulates that if the CEO determines that no substitutable goods were produced in Australia on the day the application was lodged, they must issue a written TCO order. The TCO declares that the specific elevator ropes are subject to a zero rate of duty, as opposed to the general rate of 5% (subsection 269P(3)). This TCO came into force on the date the application was lodged, 06 June 2007 (subsection 269S(1)).
The obligations under this legislation are primarily on the CEO, who must assess the application against the criteria set out in section 269C. The CEO must also ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO within a specified timeframe (subsection 269K(1)). No submissions were received in response to the notice published for TCO No. 0708647. Once the TCO is issued, it does not retroactively affect the rights of any person, except to allow importers to apply for duty refunds on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
In the event of a breach of the terms set out in the Customs Act 1901, various offences, penalties, and consequences may apply. For instance, making a false statement or representation in connection with a TCO application could lead to criminal charges. Section 254 of the Act imposes penalties for knowingly making a false statement, which can result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Civil penalties may also apply, including fines and other civil remedies, for any breach of the Act or Regulations. It is important for all parties involved to adhere strictly to the terms and conditions set out in the legislation to avoid these potential consequences.