EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0823071
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 four direction reach trucks on 25 July 2008.
Instrument
TCO No 0823071 was made on 17 October 2008. It declares that those certain four direction 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. 0823071 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, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties. One aspect of this framework is the scheme for Tariff Concession Orders (TCOs), which allows for the reduction or exemption of customs duties on certain imported goods under specific circumstances. The purpose of Tariff Concession Instrument No. 0823071, introduced in 2008, was to address the need for a lower rate of customs duty for particular goods, in this case, certain four direction reach trucks, by granting a tariff concession. This was achieved by the Chief Executive Officer of Customs, who assessed and approved the application from Toyota Material Handling Australia Pty Ltd, resulting in a tariff concession that effectively set the duty rate at free, down from the general rate of 5%. The policy objective was to support the importation of these goods without imposing additional financial burdens on importers or affecting the rights of other stakeholders as per the provisions of the Act.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the process through which Tariff Concession Orders (TCOs) can be established by the Chief Executive Officer of Customs. This legislation applies to applications for tariff concessions on specific goods, allowing for a lower rate of customs duty if certain conditions are met. The scope of the Act encompasses individuals or entities that apply for a TCO in respect of goods, provided that these goods do not fall under the categories excluded by section 269SJ of the Act, which includes goods that cannot be subject to a TCO. The geographic reach of this legislation is national, given that it is an Act of the Commonwealth of Australia. The Act stipulates that a TCO application is valid if no substitutable goods are produced in Australia at the time of application, as defined by section 269C of the Act. The application process requires the CEO to assess whether the core criteria are met, and if so, to issue a written order specifying the lower tariff rate applicable to the goods. The application process also mandates the publication of notices in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted. In the case of TCO No. 0823071, no objections were received, and the order came into force on the date the application was lodged, 25 July 2008. This order specifically benefits importers by allowing them to apply for a refund of duties on goods imported since the effective date of the TCO.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0823071, under the Customs Act 1901, revolve around the tariff concessions granted for certain goods. Specifically, section 269F (1) allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in relation to goods. If the CEO determines that the application meets the core criteria set out in sections 269C, 269B, and 269D, they must make a written TCO. For example, in this case, TCO No. 0823071 pertains to certain four direction reach trucks and was made on 17 October 2008.
The obligations imposed on the CEO under section 269K (1) of the Act include publishing a notice in the Gazette after accepting a TCO application as valid, inviting submissions from any interested parties. In this case, the CEO did not receive any submissions in response to the notice. Moreover, the TCO is deemed to come into force on the day the application is lodged, as per section 269S (1). This means TCO No. 0823071 is effective from 25 July 2008. Additionally, the TCO does not affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or incurs liabilities for actions taken before the TCO's effective date.
In terms of the consequences for breach, the Customs Act 1901 does not specify any criminal offences or penalties directly related to the failure to comply with the TCO provisions. However, if there are any breaches in the application process or misuse of the concessions granted by a TCO, general provisions of the Act may apply, potentially leading to penalties under other sections. The focus remains on ensuring the integrity and proper application of the concessions, rather than penalising non-compliance with the TCO itself.