EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0717805
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.
Kone Elevators Pty Ltd applied for a TCO in respect of certain signalisation devices on 18 October 2007.
Instrument
TCO No 0717805 was made on 30 January 2008. It declares that those certain signalisation devices 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. 0717805 is taken to have come into force on 18 October 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 to manage and regulate the import and export of goods in Australia. It provides the framework for the imposition of customs duties and other charges on imported goods and for the control of imported goods. The Act was introduced to address the need for a structured approach to managing trade and ensuring that the government could collect necessary revenues from imports. The Tariff Concession Instrument No. 0717805, enacted in 2008, is a specific instrument under the Customs Act 1901 designed to provide tariff concessions for certain goods. This instrument was introduced in response to an application by Kone Elevators Pty Ltd for a tariff concession on certain signalisation devices. The policy objective of this instrument is to facilitate trade by reducing the customs duty on specified goods, thereby lowering the cost for importers and potentially increasing the competitiveness of Australian businesses in the market.
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 provide for a lower rate of customs duty on specified goods, contingent upon meeting certain criteria, such as the absence of substitutable goods produced in Australia. The process involves an application by an interested party, review by the CEO, and potential publication in the Gazette to invite public submissions, although no submissions were received for TCO No. 0717805. The TCO applies from the date of the application, which for TCO No. 0717805 was 18 October 2007, and it benefits importers by potentially allowing them to apply for a refund of duties on goods imported since that date. Importantly, the TCO does not affect the rights of any person as at the date of registration nor impose any liabilities on any person.
Key Provisions
The Customs Act 1901, specifically Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (s 269F). This legislative instrument allows for a reduced rate of customs duty on certain goods. For instance, TCO No. 0717805, made on 30 January 2008, pertains to certain signalisation devices, granting them a duty-free status by applying item 50 of Schedule 4 to the Customs Tariff Act 1995. This means that while the general rate of duty on these goods is 5%, those covered by the TCO are exempt from this duty.
Under the Customs Act 1901, the CEO must consider an application for a TCO if it does not pertain to goods specified in section 269SJ, which lists items ineligible for a TCO. The CEO's decision hinges on whether the application meets the core criteria outlined in section 269C. This entails verifying that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Substitutable goods, as defined by section 269D, are those produced in Australia that serve a similar function to the goods in question. If the CEO is satisfied that the application meets these criteria, they must issue a written order, effectively a TCO (s 269P(3)).
The Customs Act 1901 imposes specific obligations on both the CEO and applicants. The CEO must assess each TCO application against the core criteria and, if satisfied, issue a TCO (s 269C, s 269P(3)). Additionally, the CEO is mandated to publish a notice in the Gazette inviting public submissions if a TCO application is deemed valid (s 269K(1)). Applicants must ensure their submissions are complete and meet the statutory criteria to facilitate a smooth approval process. Failure to comply with these obligations could result in legal repercussions, including the potential for the TCO to be contested in court.
The Customs Act 1901 also delineates consequences for non-compliance with TCO provisions. While specific offences and penalties are not detailed in the Act, breaches could lead to legal actions, including the possibility of civil or criminal proceedings. These could potentially result in fines or other penalties as determined by a court. The Act further ensures that the rights of individuals, other than the Commonwealth, are not adversely affected by the TCO, thereby safeguarding against retroactive liabilities (s 269S(1)).