EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0819130
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 trolleys on 16 July 2008.
Instrument
TCO No 0819130 was made on 10 October 2008. It declares that those certain trolleys 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. 0819130 is taken to have come into force on 16 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, as amended, introduced a mechanism for tariff concession orders (TCOs) to provide relief on customs duties for certain imported goods, addressing the gap where such concessions were not previously available. Enacted by the Australian Parliament, the Act aims to facilitate trade by reducing the cost of importing goods that are not produced domestically. The explanatory statement for Tariff Concession Instrument No. 0819130, made under the Act, highlights the process by which Pacific Hoists Pty Ltd successfully applied for a TCO for specific trolleys, resulting in a duty-free status for these goods. This legislative instrument underscores the policy objective of supporting Australian businesses by making essential imported goods more affordable, thereby encouraging economic activity and competition within the market.
Scope and Application
The Tariff Concession Instrument No. 0819130, made under section 269F of the Customs Act 1901, applies to Pacific Hoists Pty Ltd and the trolleys it manufactures. The Act enables the Chief Executive Officer of Customs to grant tariff concessions on certain goods, reducing the applicable customs duty rate. This instrument specifically applies to goods that are not substitutable by any goods produced in Australia, as outlined in section 269C of the Act, and were not subject to the exclusions listed in section 269SJ. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia and the subsequent tariff concessions applicable under Commonwealth law. Any person, including companies and individual importers, who seeks to benefit from the reduced duty rate must comply with the conditions set out in the instrument. The TCO does not retroactively affect the rights or impose liabilities on any party for actions taken before its effective date, which is 16 July 2008. The scope of the Act may be extended or refined through subordinate instruments, but the primary legislation outlines the core criteria and process for applying for and receiving tariff concessions.
Key Provisions
The Tariff Concession Instrument No. 0819130 pertains to the Customs Act 1901, particularly section 269F, which enables the Chief Executive Officer (CEO) of Customs to grant Tariff Concession Orders (TCO) for goods. These orders reduce the customs duty on specific goods, such as the trolleys in question, to zero if certain criteria are met (ss 269C, 269D, 269E, 269P(3)). The application for a TCO is considered valid if the CEO determines that no substitutable goods are produced in Australia on the day the application was submitted. This was the case for Pacific Hoists Pty Ltd, whose application for a TCO for certain trolleys was accepted on 10 October 2008, as no substitutable goods were produced in Australia at the time.
The obligations under this legislation require the CEO to make a decision on the TCO application based on the core criteria specified in section 269C. The CEO must also publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting submissions from any person who believes the TCO should not be granted (s 269K(1)). In this case, the CEO did not receive any submissions opposing the TCO for the trolleys. The TCO is deemed to come into effect on the date the application was lodged, which in this instance was 16 July 2008.
In terms of penalties and consequences, the Act does not explicitly state any specific penalties for non-compliance with the TCO provisions. However, any failure to adhere to the conditions set out in the TCO or the Customs Act 1901 could potentially result in legal actions or financial penalties as prescribed under other relevant sections of the Act or other applicable legislation. The primary consequence of not complying with the TCO would be the continued application of the general rate of duty on the goods, which in this case is 5% rather than the zero rate granted by the TCO. It is important for all parties to ensure compliance with the terms of the TCO and the overarching provisions of the Customs Act 1901 to avoid any adverse outcomes.