EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0820353
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.
Eagle Smf Distributors Pty Ltd applied for a TCO in respect of certain motor vehicle lifts on 18 July 2008.
Instrument
TCO No 0820353 was made on 10 October 2008. It declares that those certain motor vehicle lifts 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 10%. 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. 0820353 is taken to have come into force on 18 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 Australian Parliament, provides a framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0820353 was introduced to address the need for tariff concessions on specific goods that are not produced in Australia and for which a lower rate of customs duty can be applied. The policy objective of this legislation is to facilitate trade by reducing the duty on certain imported goods, thereby making them more competitively priced against locally produced alternatives. The Chief Executive Officer of Customs (CEO) is empowered to make a TCO if an application is received and the core criteria are met, which includes ensuring that no substitutable goods are produced in Australia. This instrument was designed to ensure that the rights of importers are protected and that no existing rights or liabilities are adversely affected by the concession.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislative provision applies to any person who may apply for a TCO for goods not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The TCO mechanism is designed to provide a lower rate of customs duty on specified goods if the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business. The geographic scope of this legislation is national, as it applies throughout Australia under the Commonwealth’s authority. The Act provides that TCOs have retrospective effect from the date of the application, thus ensuring that the rights of importers are beneficially impacted from that date. Notably, the TCO does not disadvantage any person or impose new liabilities on anyone with respect to actions taken before the registration date of the TCO. The application of the Act can be extended or refined through subordinate instruments, although no such instruments are mentioned in the provided explanatory statement.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0820353 include section 269F (269F), which allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application is valid and meets the core criteria, they must make a TCO, as per section 269C (269C) and 269P(3) (269P(3)). This order declares that the goods specified in the application are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995 (Tariff), effectively applying a lower rate of duty.
The obligations imposed by this Act include the CEO’s responsibility to assess whether a TCO application meets the core criteria. This involves ensuring that no substitutable goods are produced in Australia on the day the application was lodged, as outlined in section 269C (269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties on the proposed TCO, as stipulated in subsection 269K(1) (269K(1)). The CEO must also ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth and does not impose any liabilities on such persons prior to the TCO’s registration date.
The Act does not explicitly detail specific offences or penalties for non-compliance with the TCO provisions. However, any breaches of related provisions in the Customs Act 1901 or Customs Tariff Act 1995 could result in civil or criminal penalties. For instance, contravening the Customs Act may lead to fines of up to $22,200 for individuals or $111,000 for corporations, depending on the severity and nature of the breach. Additionally, persistent or serious violations could result in criminal charges and imprisonment.
The TCO itself, as declared in the Instrument, effectively lowers the duty rate for the specified motor vehicle lifts to zero, thus benefiting importers who may now apply for duty refunds on imports made since the TCO’s effective date of 18 July 2008. This benefit is provided under paragraph 126(1)(r) of the Regulations, which facilitates the refund process for affected importers.