EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712628
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.
Macdonald Johnston Pty Ltd applied for a TCO in respect of certain suction street and mall pedestrian sweepers on 07 August 2007.
Instrument
TCO No 0712628 was made on 12 October 2007. It declares that those certain suction street and mall pedestrian sweepers 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. 0712628 is taken to have come into force on 07 August 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, amended by Tariff Concession Instrument No. 0712628 enacted in 2007, was introduced to address the need for tariff concessions for specific goods that are not produced in Australia, thus avoiding unnecessary customs duties on imported items that have no domestic alternatives. This instrument was made by the Chief Executive Officer of Customs under the authority granted by the Customs Act, with the primary objective of ensuring that the application of tariff concessions aligns with the broader policy of promoting efficient trade practices and reducing unnecessary costs for businesses importing goods that cannot be sourced locally. The instrument specifies that the tariff concession applies to certain suction street and mall pedestrian sweepers, which are subject to a free rate of duty as opposed to the general 5% rate, thereby facilitating the import of these goods without the burden of customs tariffs.
Scope and Application
The Customs Act 1901, as amended, governs the application of Tariff Concession Orders (TCOs) to reduce customs duty on specified goods, with the authority to grant these concessions resting with the Chief Executive Officer of Customs. The Act applies to entities and individuals who seek to import goods eligible for a tariff concession, specifically those that are not already produced in Australia in the ordinary course of business. The scope of the Act extends to all types of goods, provided they meet the criteria outlined in section 269C, and is not limited to specific industries or sectors. The geographic reach of the Act is national, as it applies to imports into Australia. The Act excludes certain goods from eligibility under section 269SJ, which specifies those goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the reduced rates of duty applicable to goods subject to a TCO. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the concessions, and it provides a mechanism for importers to apply for duty refunds on goods imported since the TCO came into effect.
Key Provisions
The Tariff Concession Order No. 0712628 under the Customs Act 1901 (section 269F) applies a concessional rate of customs duty to certain suction street and mall pedestrian sweepers. This concessional rate is free, instead of the general rate of duty which is 5% (section 269P(3)). The order was made following an application by Macdonald Johnston Pty Ltd on 07 August 2007, and it became effective on the same date (subsection 269S(1)). The key criteria for making this order is that no substitutable goods were produced in Australia on the day the application was lodged, as stipulated by section 269C of the Act.
The Act imposes certain obligations on the Chief Executive Officer of Customs (CEO) when considering a Tariff Concession Order (TCO) application. Firstly, the CEO must ensure the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. If the CEO is satisfied that the application meets the core criteria, they must then proceed to make a written order (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit their views on why the TCO should not be made (subsection 269K(1)). However, in this case, no submissions were received.
The Customs Act 1901 does not explicitly detail specific offences or penalties for breach of its provisions related to TCOs. However, general provisions within the Customs Act and related regulations might impose penalties for non-compliance with customs duties or other related obligations. For example, under the Customs Act, contravening certain provisions may lead to civil or criminal penalties, which can include fines and imprisonment, depending on the severity of the breach. The exact penalties would be determined based on the specific nature of the contravention.
The Tariff Concession Order does not disadvantage any person or impose liabilities on anyone in respect of anything done or omitted before the date of registration. Importers of the specified goods can benefit from this order by applying for a refund of duty on goods imported since the effective date of the order (paragraph 126(1)(r) of the Regulations). This ensures that the rights of importers are beneficially affected, without any adverse consequences for other stakeholders.