EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711991
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.
G James Australia Pty Ltd applied for a TCO in respect of certain warehouse storage and retrieval systems on 25 July 2007.
Instrument
TCO No 0711991 was made on 02 October 2007. It declares that those certain warehouse storage and retrieval systems 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. 0711991 is taken to have come into force on 25 July 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 customs and excise duties, including the ability to offer tariff concessions on certain goods through Tariff Concession Orders (TCOs). The 2007 Tariff Concession Instrument No. 0711991 was introduced to address the need for facilitating trade by reducing customs duties on specific goods, thereby making them more competitive in the market. In this instance, the instrument was enacted in response to an application by G James Australia Pty Ltd for tariff concessions on certain warehouse storage and retrieval systems, which are now subject to a zero per cent duty rate as opposed to the general rate of five per cent. The policy objective of this instrument is to encourage the import of these goods by making them more affordable, thereby potentially boosting related industries and supporting economic growth.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods for which an application is made, provided that the goods are not those listed in section 269SJ of the Act and meet the core criteria set out in section 269C, namely, that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. The application process requires the CEO to ensure that the goods in question are not substitutable by any Australian-produced items, as defined under sections 269D and 269E of the Act. If these criteria are met, the CEO must issue a written order under section 269P(3) specifying the reduced duty rate applicable to the goods. The geographic reach of the Act is national, as it applies across Australia, and its application can be extended or restricted through subordinate instruments such as the Customs Tariff Act 1995. The application of a TCO does not retroactively affect the rights of any person, other than the Commonwealth, as per subsection 269S(1) of the Act.
Key Provisions
The main operative sections of this legislation focus on the process for applying for, making, and the effects of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO. The CEO must then determine whether the application meets the core criteria as outlined in sections 269C and 269B of the Act. If the CEO is satisfied that the application is valid and meets these criteria, they are required to make a written order under section 269P(3). This order declares that the goods in question are subject to a lower rate of customs duty as specified in Schedule 4 to the Customs Tariff Act 1995. The particular TCO in question, TCO No. 0711991, pertains to certain warehouse storage and retrieval systems and was made effective from 25 July 2007, the date the application was lodged.
The Customs Act imposes several obligations on the parties involved in the process of applying for and making a TCO. The CEO of Customs must, as soon as practicable, publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe there are reasons why the TCO should not be made (subsection 269K(1)). For the application to proceed, it must not be in respect of goods specified in section 269SJ of the Act, and it must meet the core criteria stipulated in sections 269C and 269B. Specifically, the CEO must ensure that on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. Additionally, the TCO does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities on them in respect of anything done or omitted before the registration date.
There are no explicit offences, penalties, or civil/criminal consequences mentioned for breaches of the provisions within this legislation. However, the failure to comply with the stipulated criteria for making a TCO or not adhering to the prescribed process could result in the CEO declining the application. This would mean that the applicant would not receive the tariff concession they sought. Additionally, if an entity incorrectly claims a tariff concession on goods for which they are not eligible, they could face penalties under other sections of the Customs Act, such as those related to fraudulent claims or misrepresentation, which are not detailed in this specific explanatory statement.