EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720749
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.
Scan Rent Australia Pty Ltd applied for a TCO in respect of certain personnel material hoists on 04 December 2007.
Instrument
TCO No 0720749 was made on 29 February 2008. It declares that those certain personnel material hoists 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. 0720749 is taken to have come into force on 04 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties, including the mechanism for Tariff Concession Orders (TCOs). This legislative instrument, specifically Tariff Concession Instrument No. 0720749, was introduced to address the gap in the tariff structure by providing a concessionary rate of customs duty for certain goods that are not produced in Australia and for which no substitutable goods are produced domestically. The policy objective behind this TCO, as outlined in the explanatory statement, is to alleviate the financial burden on businesses that import these specific goods, thereby supporting their competitiveness and operational efficiency. The instrument was made by the Chief Executive Officer of Customs, following an application by Scan Rent Australia Pty Ltd, and it became effective from the date of the application, 4 December 2007. The implementation of this TCO ensures that no existing rights or liabilities of any party, other than the Commonwealth, are adversely affected.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework for Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs. This mechanism allows for a lower rate of customs duty on goods specified in a TCO. Any person may apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act, which lists those that cannot be subject to a TCO. The CEO must determine if the application meets the core criteria, which is satisfied if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Once a TCO is issued, it benefits the rights of importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. This legislation applies across the Commonwealth of Australia and does not impose any liabilities on persons other than the Commonwealth. Subordinate instruments may further extend or restrict the application of this Act.
Key Provisions
The Tariff Concession Instrument No. 0720749, which pertains to the Customs Act 1901, provides for a lower rate of customs duty on certain personnel material hoists, as declared in item 50 of Schedule 4 to the Tariff. Section 269F of the Act allows for an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods, with the primary condition being that the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the application is deemed valid, section 269C stipulates that a TCO will be granted if no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. In this case, the CEO was satisfied that no such substitutable goods existed, leading to the issuance of TCO No. 0720749 on 29 February 2008.
The obligations imposed by the Act primarily involve the CEO of Customs, who must assess TCO applications against the criteria set out in sections 269C, 269B, and 269D of the Act. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the making of a TCO, as outlined in subsection 269K(1). This process ensures transparency and allows for potential objections to be considered before a decision is made. In this instance, the CEO did not receive any submissions opposing the TCO.
The Act does not explicitly outline offences or penalties for breaching the provisions related to TCOs. However, any misuse of a TCO or failure to comply with the conditions set out in the Act could potentially lead to civil or criminal consequences under other relevant sections of the Customs Act 1901. The maximum penalties for such breaches can vary depending on the specific offence and the discretion of the court. Importers who benefit from the TCO may also be subject to obligations under other sections of the Act and related regulations, particularly concerning the refund of duty as per paragraph 126(1)(r) of the Regulations. The TCO itself does not impose any liabilities on any person other than the Commonwealth.