EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806527
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.
Pacific Hoists Pty Ltd applied for a TCO in respect of certain electric winches on 05 May 2008.
Instrument
TCO No 0806527 was made on 25 July 2008. It declares that those certain electric winches 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. 0806527 is taken to have come into force on 05 May 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 Customs Act 1901 was enacted to manage the importation and exportation of goods into and out of Australia, including the imposition and remission of customs duties and taxes. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act aims to provide relief from customs duty on certain goods, provided that no substitutable goods are produced in Australia. The instrument in question, Tariff Concession Instrument No. 0806527, was introduced to address a specific application by Pacific Hoists Pty Ltd for tariff concessions on certain electric winches. The instrument was made by the Chief Executive Officer of Customs, who is required to assess whether the application meets the core criteria stipulated in the Act. The policy objective of this instrument is to facilitate the import of specific goods by reducing their customs duty rate, thereby supporting businesses and potentially lowering costs for consumers, without disadvantaging any existing parties or imposing new liabilities.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods that may qualify for a lower rate of customs duty under a TCO. The Act's geographic reach encompasses the entire Commonwealth of Australia, with its provisions uniformly applicable across all states and territories. Any application for a TCO must be evaluated against the core criteria set out in the Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Section 269SJ of the Act excludes certain goods from being subject to a TCO, ensuring that the scheme is applied appropriately. The application process involves public consultation, where interested parties can submit objections, although in the case of TCO No. 0806527, no such submissions were received. The commencement date of the TCO is aligned with the date of the application, ensuring that rights and liabilities are effectively managed from the outset. Importantly, the TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities, thereby safeguarding against retrospective disadvantages.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0806527 under the Customs Act 1901 (section 269F) enable an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) on specific goods, provided the goods do not fall under the categories specified in section 269SJ. If the CEO determines that the application meets the core criteria outlined in section 269C, such as the absence of substitutable goods produced in Australia, they must issue a TCO. This instrument, TCO No. 0806527, specifies that certain electric winches are subject to a concessional rate of duty, reducing the general rate of 5% to a rate of free.
The Act imposes several obligations on the parties involved. For the applicant, it is essential to ensure that the application meets the core criteria, particularly the absence of substitutable goods produced in Australia. The CEO must verify these criteria and, if satisfied, issue a written TCO. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. In this instance, the CEO received no submissions, which facilitated the issuance of the TCO.
In terms of offences, penalties, or consequences for non-compliance, the Act does not explicitly outline specific civil or criminal penalties for breaching the terms of a TCO. However, any improper or fraudulent application for a TCO could potentially lead to legal consequences under other sections of the Customs Act 1901. These could include fines or imprisonment, depending on the severity of the breach. It is also noteworthy that the TCO does not impose any liabilities on any person and does not affect the rights of individuals or entities in a way that would disadvantage them or impose liabilities for actions taken before the TCO's effective date.