EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0823069
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 Pty Ltd applied for a TCO in respect of certain pallet trucks on 25 July 2008.
Instrument
TCO No 0823069 was made on 17 October 2008. It declares that those certain pallet 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. 0823069 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 Tariff Concession Instrument No. 0823069, made under the Customs Act 1901, aims to address the need for tariff concessions on specific goods, allowing for lower rates of customs duty for certain imported goods. Enacted by the Chief Executive Officer of Customs, this instrument was introduced to provide relief to businesses importing goods that are not produced in Australia and do not have substitutable alternatives. The policy objective is to encourage trade by reducing the cost of imported goods, thereby enhancing competitiveness and benefiting importers by allowing them to apply for refunds on duties already paid. This instrument was developed in response to an application from Toyota Material Handling Australia Pty Ltd for tariff concessions on certain pallet trucks, and it was implemented without any submissions opposing the concessions, reflecting the alignment of the instrument with broader trade objectives.
Scope and Application
The Tariff Concession Instrument No. 0823069 pertains to a specific application under Part XVA of the Customs Act 1901, allowing for the reduction of customs duty rates on certain goods. This instrument applies to entities and individuals who import specified pallet trucks, granting them a concession from the general customs duty rate of 5% to a duty-free status. The application of this concession is contingent upon the Chief Executive Officer of Customs being satisfied that the pallet trucks in question do not have substitutable goods produced in Australia. The geographic and jurisdictional reach of this Act is national, operating under the overarching framework of the Customs Act 1901, which is a Commonwealth Act. The TCO does not disadvantage any person by affecting their rights as at the date of registration, nor does it impose any liabilities on persons other than the Commonwealth for actions taken prior to the TCO's effective date. Importantly, this instrument does not extend to goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The TCO, once made, comes into force on the date the application was lodged, in this case, 25 July 2008, and does not retroactively affect any duties or liabilities.
Key Provisions
The Tariff Concession Instrument No. 0823069, as made under the Customs Act 1901, provides a tariff concession for certain pallet trucks, reducing the customs duty on these goods from the general rate of 5% to free. The instrument, numbered 0823069, was issued on 17 October 2008 in response to an application by Toyota Material Handling Australia Pty Ltd, lodged on 25 July 2008. According to section 269P(3) of the Customs Act, this tariff concession was granted because the Chief Executive Officer (CEO) of Customs determined that no substitutable goods were produced in Australia at the time the application was lodged, satisfying the core criteria outlined in section 269C of the Act.
Entities and individuals affected by this legislation must ensure compliance with the Act's provisions regarding tariff concessions. Section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any interested parties who may oppose the concession. In this instance, no submissions were received, leading to the issuance of the TCO. Furthermore, section 269S(1) specifies that the TCO is deemed to have come into effect on the date the application was lodged, which is 25 July 2008 for this particular case. Importers of the specified pallet trucks will benefit from this concession, potentially applying for refunds on duty paid for goods imported since the concession's effective date under paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 imposes certain obligations and consequences for non-compliance with the terms of a Tariff Concession Order (TCO). Section 269SJ lists goods that cannot be subject to a TCO, and any application in respect of such goods would be invalid. Failure to comply with the TCO provisions may result in legal ramifications. The Act does not specify particular offences or penalties in the explanatory statement for breaching TCO terms, but general provisions within the Customs Act may apply. For instance, section 246 of the Act provides for civil penalties for breaches of customs laws, which could include fines up to $11,100 or twice the value of the goods, whichever is greater, for individuals, and up to $55,500 or three times the value of the goods for corporations. Additionally, criminal penalties may apply for more serious breaches, including fines and imprisonment, as outlined in the Act.