EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917126
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.
Skywork Helicopters applied for a TCO in respect of certain cargo hook lifting carousel on 20 May 2009.
Instrument
TCO No 0917126 was made on 14 August 2009. It declares that those certain cargo hook lifting carousel 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. 0917126 is taken to have come into force on 20 May 2009.
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, establishes a framework for the regulation of customs duties and related matters. Among its provisions, Part XVA of the Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on specified goods. This legislative instrument addresses the gap by providing a mechanism for tariff concessions where no substitutable goods are produced in Australia. TCO No. 0917126, made on 14 August 2009, exemplifies this process by granting a tariff concession for certain cargo hook lifting carousels, reducing the duty rate from 5% to free. The instrument was introduced following an application by Skywork Helicopters on 20 May 2009, and it came into force on the same date. The policy objective is to facilitate trade by reducing customs duties on imported goods where no local equivalent is produced, thereby benefiting importers by potentially allowing them to claim refunds of duties paid prior to the order's effective date.
Scope and Application
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO), reducing customs duty on certain goods. These orders apply to any goods specified in the TCO, which in this case includes certain cargo hook lifting carousels. The application of a TCO is contingent upon the CEO determining that no substitutable goods are produced in Australia at the time of the application, as outlined in section 269C of the Act. The application process involves an invitation for public submissions, although none were received for TCO No. 0917126. The TCO has a retroactive effect, deemed to have come into force on the date the application was lodged, which was 20 May 2009 for this particular instrument. The TCO does not affect any pre-existing rights or impose any new liabilities on individuals or entities other than the Commonwealth and can benefit importers by allowing them to apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0917126 under the Customs Act 1901 (section 269F) allow for the application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. The Act outlines that if the CEO determines that the application is valid and meets the core criteria (section 269C), they must make a written order that specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively granting tariff concessions to the goods in question. This means that the general rate of duty on the specified goods is reduced or eliminated, depending on the particular concession granted. In the case of TCO No. 0917126, the CEO determined that the application met the core criteria, and the TCO was issued to grant a tariff concession to certain cargo hook lifting carousels, reducing their duty rate to free from the general rate of 5%.
The Customs Act 1901 imposes several obligations on the parties involved in the process of applying for and receiving a TCO. For applicants, such as Skywork Helicopters, it is necessary to ensure that their application is valid and meets the core criteria, particularly by demonstrating that no substitutable goods are produced in Australia (section 269C). The CEO, on the other hand, has the obligation to review the application and determine whether it satisfies the necessary conditions (section 269K). Additionally, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to submit their views (subsection 269K(1)). The CEO must also ensure that the TCO does not adversely affect the rights of any person as at the date of registration, apart from the Commonwealth, and does not impose any liabilities on any person in respect of anything done or omitted before the registration date (subsection 269S(1)).
Failure to comply with the provisions of the Customs Act 1901 and the associated TCO can lead to various consequences. The Act does not explicitly state penalties for breaches, but the implications of not adhering to the conditions for obtaining a TCO can be significant. If the CEO determines that an application does not meet the core criteria, the TCO will not be granted, and the applicant will not benefit from the tariff concessions. In cases of non-compliance with the Act’s provisions regarding the rights and liabilities of persons, the consequences could include legal challenges or disputes regarding the validity or impact of the TCO. Given the nature of the Act, any significant breach could potentially lead to civil or criminal penalties, though specific penalties are not detailed in the explanatory statement provided.
The process of issuing a TCO under the Customs Act 1901 is designed to ensure that tariff concessions are granted fairly and in accordance with the legislative framework. The Act and the associated regulations provide a structured pathway for applicants to seek concessions, while also imposing clear obligations on the CEO to review and approve applications. While the explanatory statement does not detail specific penalties for breaches, the implications of non-compliance could include the denial of tariff benefits and potential legal repercussions. The careful consideration and adherence to the legislative requirements are essential for all parties involved to ensure the effective and lawful administration of tariff concessions.