EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719100
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.
Doppelmayr Australia Pty Ltd applied for a TCO in respect of certain chairlift parts on 12 November 2007.
Instrument
TCO No 0719100 was made on 30 January 2008. It declares that those certain chairlift parts 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. 0719100 is taken to have come into force on 12 November 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 Parliament of Australia, established a framework for the administration of customs duties and the application of tariff concessions to imported goods. The Act, particularly Part XVA, provides mechanisms through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to lower customs duty rates on specified goods. The problem this legislation aimed to address was the need to facilitate the importation of goods that are not produced in Australia and for which no suitable domestic alternatives exist, thereby encouraging trade and reducing costs for businesses. The policy objective, as outlined in the explanatory statement for Tariff Concession Instrument No. 0719100, is to ensure that the tariff concession scheme operates fairly and effectively, allowing for the duty-free importation of certain chairlift parts once it is confirmed that no substitutable goods are produced in Australia. This approach benefits importers by potentially reducing their duty liabilities and encourages the importation of goods that would otherwise be costly to procure domestically.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative provision applies to any person who can demonstrate that goods for which they are seeking a tariff concession are not substitutable by goods produced in Australia in the ordinary course of business. The scope of the Act extends across the Commonwealth of Australia and pertains to transactions involving the importation of goods that meet the specified criteria. A TCO application is considered valid if it aligns with the core criteria outlined in the Act, particularly if no substitutable goods are produced in Australia. The application process includes public consultation, where interested parties are invited to submit objections to the TCO. The geographic reach of this legislation is national, and it applies to the importation of goods subject to the Customs Tariff Act 1995. The TCO does not affect the rights of any person as at the date of registration, ensuring that no one, other than the Commonwealth, is disadvantaged or incurs new liabilities due to the TCO. The tariff concession does not impose liabilities on any person, and it only benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of this Tariff Concession Instrument (TCO) under the Customs Act 1901 include section 269F, which allows for applications for tariff concession orders, and section 269C, which outlines the core criteria that must be met for the Chief Executive Officer of Customs (CEO) to grant such an order. Under section 269P(3), once the CEO is satisfied that an application meets these criteria, a written order is made, declaring the goods to which the concession applies. In this case, TCO No. 0719100 (paragraphs 2 and 3) declares that certain chairlift parts are subject to a concession, with a general duty rate of 5% reduced to free duty.
The Act imposes several obligations on the parties involved. Firstly, applicants such as Doppelmayr Australia Pty Ltd must ensure their application for a TCO meets the core criteria stipulated in section 269C. This involves demonstrating that no substitutable goods are produced in Australia in the ordinary course of business. The CEO has the responsibility to assess these applications and, if satisfied, to issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). This ensures transparency and allows for any objections to be considered before the TCO is finalised.
Breaching the conditions of the TCO or failing to comply with the requirements of the Customs Act 1901 can lead to civil or criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, under Australian law, non-compliance with customs regulations can result in penalties such as fines, imprisonment, or both. For instance, section 269 of the Customs Act provides for penalties for offences related to incorrect declarations or fraudulent behaviour, which can include significant financial penalties and imprisonment. The exact penalties would depend on the severity and nature of the breach.
Furthermore, the Act ensures that the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities for actions taken before the TCO's effective date. This protection is outlined in subsection 269S(1), which states that the TCO comes into force on the day the application is lodged. The rights of importers are beneficially affected, allowing them to apply for refunds of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. This provision ensures that legitimate importers are not adversely affected by the concession order.