EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803478
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.
Powerrex Australia Pty Ltd applied for a TCO in respect of certain hydraulic hoists on 06 March 2008.
Instrument
TCO No 0803478 was made on 23 May 2008. It declares that those certain hydraulic 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. 0803478 is taken to have come into force on 06 March 2008.
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. 0803478, enacted in 2008, is an instrument made under the Customs Act 1901 with the primary objective of granting tariff concessions for specific goods. This legislation was introduced to address the need for reducing customs duties on certain imported goods, thereby providing economic benefits to businesses and consumers by lowering the cost of imported goods. The instrument was developed in response to an application by Powerex Australia Pty Ltd for tariff concessions on certain hydraulic hoists, which was lodged with the Chief Executive Officer of Customs on 6 March 2008. The CEO of Customs determined that these goods were eligible for a tariff concession order as no substitutable goods were produced in Australia at the time of the application. The instrument was published in the Gazette, inviting submissions from interested parties, none of which were received. Consequently, the instrument came into effect on the date the application was lodged, 6 March 2008. The tariff concession granted under this instrument allows for the importation of the specified hydraulic hoists duty-free, effectively benefiting importers who can apply for duty refunds on goods imported since the instrument's effective date.
Scope and Application
The Tariff Concession Instrument No. 0803478, enacted under the Customs Act 1901, applies to the specific goods for which Powerrex Australia Pty Ltd applied, namely certain hydraulic hoists. The instrument was issued by the Chief Executive Officer of Customs, following a valid application and a determination that the core criteria were met, as per section 269F of the Act. The instrument provides that these particular hydraulic hoists are to be treated as goods subject to item 50 of Schedule 4 to the Customs Tariff Act 1901, thereby conferring a zero rate of duty on them. This concession is effective from 6 March 2008, the date on which the application for the tariff concession order was lodged. The application of the Tariff Concession Instrument extends to any person importing the specified hydraulic hoists into Australia from that date forward, with the exclusion of any goods identified under section 269SJ of the Act, which are ineligible for tariff concessions. The instrument does not affect any pre-existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0803478 (hereinafter referred to as the Instrument) involve the granting of tariff concessions for certain hydraulic hoists under the Customs Act 1901 (the Act). Specifically, section 269F of the Act allows for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written order declaring that the goods in question are subject to a lower rate of customs duty. This particular Instrument, TCO No. 0803478, was made on 23 May 2008, declaring that certain hydraulic hoists are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with the rate of duty being free, down from the general rate of 5%.
Under the Act, the CEO has specific obligations when processing a TCO application. First, the CEO must ensure that the application is not in respect of goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. If the application passes this initial screening, the CEO must then determine whether the application meets the core criteria outlined in section 269C. This involves confirming that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. Once these criteria are satisfied, the CEO is required to make a written TCO.
Additionally, the Act mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this case, no submissions were received. The TCO is considered to have come into force on the date the application was lodged, as per subsection 269S(1) of the Act. The TCO does not affect the rights of any person, other than the Commonwealth, in relation to actions taken before the date of registration. Importers, however, will benefit from being able to apply for a refund of duty on goods imported since the TCO's effective date, under paragraph 126(1)(r) of the Regulations.
In terms of consequences, breaches of the provisions or obligations under this Instrument could result in civil or criminal penalties. The Act does not specify maximum penalties for non-compliance with the TCO provisions; however, general penalties for breaches of the Customs Act can include fines and imprisonment. The specifics of any penalties would depend on the nature and severity of the breach, and would be determined in accordance with the broader provisions of the Act and any relevant regulations.