EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0838131
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 electric hoists on 03 November 2008.
Instrument
TCO No 0838131 was made on 30 January 2009. It declares that those certain electric hoists 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. 0838131 is taken to have come into force on 03 November 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. 0838131, enacted in 2009, addresses a specific need within the Customs Act 1901 by providing tariff concessions for certain goods. The Act, enacted by the Australian Parliament, establishes a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to apply lower rates of customs duty on eligible goods. The primary objective of this instrument is to ensure that Australian businesses have access to competitively priced goods by reducing the duty on specific items where no suitable Australian-made alternatives exist. The instrument facilitates this by providing a process for businesses to apply for tariff concessions, thereby promoting fair trade practices and economic efficiency.
This instrument, TCO No. 0838131, was introduced following an application from Pacific Hoists Pty Ltd for tariff concessions on certain electric hoists. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria under the Customs Act. The instrument declares that the specified electric hoists are subject to a duty rate of free, as opposed to the general rate of 5%, benefiting importers who can claim duty refunds on imports since the effective date of the concession. This measure aligns with the overarching policy objective of fostering a competitive business environment in Australia by ensuring that businesses can access necessary goods at reduced costs.
Scope and Application
The Customs Act 1901, as outlined in Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce the customs duty on certain imported goods. This mechanism is applicable to individuals or entities that wish to import goods that are not being produced domestically and meet the specified criteria for tariff concessions. The TCO process ensures that if the CEO determines an application meets the core criteria, a TCO is issued, effectively applying a lower rate of duty, or in some cases, no duty at all, to the specified goods. For instance, TCO No. 0838131, made on 30 January 2009, pertains to certain electric hoists and sets their customs duty rate to free, provided that these goods are not being produced in Australia and no suitable substitutes exist. The scope of the TCO extends nationally, impacting the rights of importers by potentially allowing them to claim refunds for duties paid on eligible goods imported since the effective date of the TCO. It is important to note that the TCO does not disadvantage any person other than the Commonwealth nor does it impose any new liabilities on any person.
Key Provisions
The main operative sections of this legislation, Tariff Concession Instrument No. 0838131, provide the legal framework for the creation and enforcement of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for applications to be made by any person to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specified goods (269F). Section 269C outlines the core criteria that must be satisfied for a TCO application to be approved, including the requirement that no substitutable goods were produced in Australia on the day the application was lodged (269C). Upon meeting these criteria, the CEO must issue a written order declaring that the goods in question are eligible for a tariff concession (269P(3)).
Under this Act, the CEO has a series of obligations and requirements to fulfill when processing a TCO application. These include ensuring that the application is valid and not in respect of goods specified in section 269SJ, which cannot be subject to a TCO (269SJ). The CEO must also determine whether the application meets the core criteria set out in section 269C, considering the definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" as provided in sections 269D, 269E, and the Act itself (269B). Furthermore, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (269K(1)).
Failure to comply with the requirements of the Customs Act 1901 and the associated TCO may result in various consequences. If the CEO determines that a TCO application does not meet the core criteria, the application will be rejected, and the applicant may need to seek alternative methods for reducing customs duty on the goods. For breaches of the Act or associated regulations, the maximum penalties can be substantial. These may include fines up to $11,100 for individuals and $55,500 for corporations, as well as potential imprisonment terms. The severity of these penalties underscores the importance of adhering to the provisions outlined in the Act and its associated instruments.