EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720744
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.
Jands Pty Ltd applied for a TCO in respect of certain lifting machines on 10 December 2007.
Instrument
TCO No 0720744 was made on 29 February 2008. It declares that those certain lifting machines 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. 0720744 is taken to have come into force on 10 December 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 Tariff Concession Instrument No. 0720744, enacted in 2008 under the Customs Act 1901, was introduced to provide tariff concessions for certain goods that were not produced in Australia and thus would not compete with locally manufactured products. This instrument was created in response to an application by Jands Pty Ltd for tariff concessions on specific lifting machines. The Customs Act 1901 enables the Chief Executive Officer of Customs to grant such concessions if certain criteria are met, notably that no substitutable goods are produced domestically. By granting this concession, the policy objective was to facilitate the import of these goods at a reduced duty rate, ultimately benefiting importers by potentially lowering their costs and increasing the availability of such goods in the market. The instrument came into effect on the date the application was lodged, 10 December 2007, and ensures that no existing rights or liabilities are adversely affected by its implementation.
Scope and Application
The Customs Act 1901, as modified by the Tariff Concession Instrument No. 0720744, applies to specific goods that are the subject of a Tariff Concession Order (TCO). This particular Instrument pertains to certain lifting machines, and its application is limited to those goods. The Act allows the Chief Executive Officer of Customs to grant a TCO to reduce customs duty on imported goods if certain criteria are met, specifically if no substitutable goods are produced in Australia. The application of the Act is national in scope, operating under the Commonwealth jurisdiction, and it extends to all industries and entities involved in the importation of goods subject to a TCO. However, it explicitly excludes goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, which are made under the authority of the Customs Act 1901. In this instance, the TCO has been effective from the date the application was lodged, providing benefits to importers of the specified goods by allowing them to apply for a refund of duty.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0720744, which is grounded in the Customs Act 1901 (section 269F), allow for the application for a Tariff Concession Order (TCO) by a person in respect of specific goods. If the Chief Executive Officer of Customs (CEO) determines that the application meets the core criteria (sections 269C and 269P), the CEO is required to make a written order that declares the specified goods as subject to the TCO, thereby granting them a reduced or free customs duty rate. In this instance, the TCO No. 0720744 applies to certain lifting machines, granting them a duty rate of free, whereas the general rate is 5% (section 269P(3)).
The Act imposes several obligations on the parties involved. Firstly, the applicant must ensure that the goods in question are not specified in section 269SJ of the Act, which outlines goods ineligible for a TCO. The CEO has the duty to assess whether the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business (sections 269C and 269S). Furthermore, upon accepting a valid TCO application, the CEO is mandated to publish a notice in the Gazette, inviting submissions from any person who may have reasons to oppose the TCO (subsection 269K(1)). The TCO itself comes into force on the day the application is lodged (subsection 269S(1)).
There are no specific offences or penalties mentioned in the explanatory statement for breaches related to the TCO application process or the obligations of the CEO. However, it is implied that failure to adhere to the statutory requirements could lead to the TCO not being granted, thus leaving the applicant without the intended tariff concession. Moreover, the TCO ensures that it does not affect the rights of any person as at the date of registration, thus avoiding any disadvantage or imposition of liabilities on any person (subsection 269S(3)). Importers, however, stand to benefit from this arrangement, as they can apply for a refund of duty on goods imported since the TCO took effect (paragraph 126(1)(r) of the Regulations).