EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721239
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.
Schindler Lifts Australia Pty Ltd applied for a TCO in respect of certain lift power and transmisson unit on 13 December 2007.
Instrument
TCO No 0721239 was made on 29 February 2008. It declares that those certain lift power and transmisson unit 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. 0721239 is taken to have come into force on 13 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 Commonwealth Parliament, facilitates the reduction of customs duty on specific goods through Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. The Act allows for a lower rate of customs duty to apply to goods subject to a TCO, provided certain criteria are met. Specifically, under section 269F, a person may apply to the CEO for a TCO concerning goods, and if the application is deemed valid, the CEO must decide whether it meets the core criteria, which includes ensuring no substitutable goods are produced in Australia. The policy objective of this legislation is to encourage the importation of goods that are not domestically produced, thereby potentially benefiting consumers and the broader economy by providing access to competitively priced imported goods.
In 2008, Tariff Concession Instrument No. 0721239 was introduced to provide a concession on certain lift power and transmission units, aligning with the legislative framework established by the Customs Act 1901. This instrument, which came into effect on 13 December 2007, was created in response to an application by Schindler Lifts Australia Pty Ltd. The CEO determined that the specified goods were not substitutable by Australian-produced goods and thus qualified for a TCO, resulting in the general duty rate of 5% being reduced to free. No objections were received during the consultation period, and the rights of importers were unaffected, with potential duty refunds available for imports made since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0721239, made under the Customs Act 1901, applies to Schindler Lifts Australia Pty Ltd and specifically to certain lift power and transmission units that the company imports. The application for a Tariff Concession Order (TCO) was lodged on 13 December 2007, and the instrument was made on 29 February 2008, declaring that these particular goods are subject to a zero rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995, rather than the general rate of 5%. The TCO is applicable at a Commonwealth level and extends to the entire nation. The process for determining eligibility for a TCO involves satisfying the core criteria, which includes the absence of substitutable goods produced in Australia on the date the application was lodged. The Act allows for the CEO of Customs to make subordinate instruments to extend or restrict the application of TCOs, ensuring flexibility in managing customs duties on imported goods. There are no stated exclusions or exemptions in this specific TCO, and the instrument does not disadvantage any person by imposing liabilities for actions taken before its effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0721239 under the Customs Act 1901 (section 269C) establish the criteria for making a Tariff Concession Order (TCO). The instrument, TCO No. 0721239, specifies that certain lift power and transmission units are eligible for a lower rate of customs duty. Section 269P(3) of the Act mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For this particular TCO, the general rate of duty on the specified goods is 5%, but the rate for goods subject to the TCO is free.
The obligations imposed by the Act on the parties involved are centred on the application process and the decision-making criteria for the CEO. According to section 269F of the Act, an application for a TCO can be made by a person in respect of goods. The CEO must then determine whether the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO finds that the application satisfies these criteria, they are required to make a TCO as outlined in section 269P(3). Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission.
The Act also outlines potential consequences for breaches of its provisions. However, the Explanatory Statement does not detail specific offences, penalties, or civil/criminal consequences for breaches of the TCO. Generally, under the Customs Act 1901, breaches of customs regulations can lead to civil or criminal penalties, including fines and imprisonment, depending on the severity and nature of the offence. The specific penalties would be determined by the relevant sections of the Customs Act 1901 and any applicable regulations. The TCO itself does not impose any liabilities on any person, as clarified in the instrument. Instead, it provides a benefit to importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.