EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816004
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.
Lift And Shift Pty Limited applied for a TCO in respect of certain cargo carrying stair climbers on 02 July 2008.
Instrument
TCO No 0816004 was made on 03 October 2008. It declares that those certain cargo carrying stair climbers 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. 0816004 is taken to have come into force on 02 July 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, enacted by the Parliament of Australia, provides a framework for the regulation of customs duties and related activities. The Act was amended to include the creation of Tariff Concession Orders (TCOs) under Part XVA, allowing for the reduction or exemption of customs duties on specified goods. This mechanism was introduced to address the need for targeted tariff relief to support Australian industries by making certain imported goods more competitive with locally produced alternatives. The Tariff Concession Instrument No. 0816004, made on 3 October 2008, is an example of this legislative framework in action, providing a zero percent duty rate for certain cargo carrying stair climbers, which had a general duty rate of 5 percent, as no substitutable goods were produced in Australia. The process involves the Chief Executive Officer of Customs assessing applications against specific criteria and, if satisfied, making a written order to effect the tariff concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which allows for the application of a lower rate of customs duty on certain goods. The Act applies to any person or entity wishing to import goods that could potentially benefit from a TCO, provided that the goods in question are not specified in section 269SJ of the Act, which outlines goods ineligible for TCOs. The jurisdiction of this legislation is national, as it falls under the Commonwealth. A TCO may be applied for by any individual or entity under section 269F of the Act, provided the Chief Executive Officer of Customs is satisfied that the application meets the core criteria stipulated in section 269C. These criteria include ensuring that no substitutable goods are produced in Australia on the date the application was lodged. The geographic reach of the Act is therefore national, impacting all entities importing goods within Australia. The Act allows for the extension or restriction of its application through subordinate instruments, such as the Customs Tariff Act 1995, which provides the schedule of duty rates applied to goods under a TCO. The commencement of a TCO is effective from the date the application is lodged, as stated in subsection 269S(1) of the Act, with no retroactive disadvantages to any party except the Commonwealth.
Key Provisions
The Customs Act 1901, as referenced in sections 269C, 269F, 269B, and 269P, establishes a framework for Tariff Concession Orders (TCOs). Section 269F allows individuals to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods, provided the goods do not fall under the exceptions listed in section 269SJ. If the CEO determines that the application meets the core criteria, as outlined in section 269C, which requires that no substitutable goods were produced in Australia on the application's date, the CEO must issue a written TCO. This order, in turn, declares that the specified goods are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995, thereby applying a prescribed duty rate. For instance, the TCO No. 0816004, issued on 03 October 2008, pertains to certain cargo carrying stair climbers and applies item 50 of the Tariff, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes specific obligations on the CEO, including accepting TCO applications and ensuring they meet the core criteria, as defined in section 269C. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette once an application is accepted, inviting any interested party to submit any reasons against the TCO's issuance. This procedural step ensures transparency and allows for stakeholder input before the TCO is finalised. Moreover, the Act, through subsection 269S(1), stipulates that a TCO is considered effective from the date the application is lodged, which means that the legal status and duty implications apply retroactively to that date.
Failure to comply with the requirements of the Customs Act 1901 can lead to civil and criminal consequences. Although the explanatory statement does not explicitly detail penalties, breaches of customs regulations generally attract significant fines and potential imprisonment under the Customs Act and related legislation. For example, knowingly making a false statement in a customs document can result in a penalty of up to five times the duty evaded or, in the case of a corporation, a fine of up to $210,000. Furthermore, criminal proceedings may be initiated for more severe breaches, leading to imprisonment for up to five years. These penalties underscore the importance of adhering to the statutory requirements and the potential ramifications for non-compliance.