EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0823068
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.
Toyota Material Handling Australia applied for a TCO in respect of certain retractable mast reach trucks on 25 July 2008.
Instrument
TCO No 0823068 was made on 16 January 2009. It declares that those certain retractable mast reach trucks 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. 0823068 is taken to have come into force on 25 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 was enacted to provide a framework for the administration of customs and excise duties, including mechanisms for tariff concession orders that aim to reduce the duty on certain goods under specific conditions. This Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders, which apply a lower rate of customs duty to goods specified in the order if certain criteria are met. The primary problem this legislation addresses is the need to encourage the importation of goods that are not produced in Australia, thereby fostering competition and providing consumers with a wider range of products at potentially reduced prices. The policy objective is to provide economic benefits by facilitating the importation of goods where local production does not occur, without imposing undue burdens on existing industries. This approach ensures that the benefits of international trade are realised while also supporting the broader economic framework of Australia.
Scope and Application
The Tariff Concession Instrument No. 0823068 under the Customs Act 1901 applies to certain retractable mast reach trucks that Toyota Material Handling Australia applied for a tariff concession on 25 July 2008. The instrument was made on 16 January 2009, declaring these specific trucks as goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, granting them a duty-free status. The application of this instrument is limited to goods that are not specified in section 269SJ of the Customs Act 1901, which excludes certain goods from tariff concession orders. The CEO of Customs must ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C of the Act. The CEO was satisfied with the application meeting the core criteria and subsequently issued the TCO. The instrument's scope is national, applying across Australia, and its effects are limited to the goods specified within the instrument, without imposing liabilities on any person or disadvantaging any rights as at the date of registration.
Key Provisions
The key operative sections of this legislation are sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) requires the Chief Executive Officer of Customs (CEO) to make a written order (a TCO) if the application meets these core criteria, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S(1) specifies that a TCO comes into force on the day the application is lodged. In this instance, TCO No. 0823068 was made on 16 January 2009, declaring that certain retractable mast reach trucks are subject to the tariff concession, with a rate of duty reduced from 5% to free.
The obligations imposed by this legislation on the parties involved primarily concern the application and assessment process for a TCO. The applicant, such as Toyota Material Handling Australia in this case, must submit a valid application to the CEO, ensuring that it complies with the criteria outlined in the Customs Act 1901. The CEO is obligated to review the application, assess whether it meets the core criteria, and if so, make a written TCO. The CEO must also publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received.
In terms of offences, penalties, and consequences for breach, the Customs Act 1901 does not explicitly outline specific criminal or civil penalties for failing to comply with the TCO process. However, general legal principles apply, and any failure to comply with the Act could potentially result in legal action, including fines or other penalties as prescribed by relevant laws. The Act ensures that the rights of importers are beneficially affected by the TCO and that no existing liabilities are imposed on any person as a result of the concession.
The implications of not adhering to the TCO process could include disputes over the validity of the concession, potential financial losses due to incorrect duty payments, and complications in trade compliance. While the specific penalties for breaches are not detailed in this particular legislation, adherence to the Customs Act and its associated regulations is crucial to avoid any legal repercussions.
Overall, the TCO process outlined in the Customs Act 1901 facilitates tariff concessions for specified goods, provided the core criteria are met, and the application is properly assessed by the CEO. The Act ensures that the process is transparent, with opportunities for public input, and that the rights of importers are protected, while imposing no liabilities on any person beyond the Commonwealth.