EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000199
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 pallet trucks on 04 January 2010.
Instrument
TCO No 1000199 was made on 22 March 2010. 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. 1000199 is taken to have come into force on 04 January 2010.
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, provides a framework for the administration of customs duties and regulations on imported goods. The Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) under Part XVA, which apply reduced customs duty rates to specified goods. This mechanism was introduced to address the need for flexibility in customs duties to support certain economic and trade policy objectives, particularly where domestic production of substitutable goods does not exist. The Tariff Concession Instrument No. 1000199, made on 22 March 2010, provides tariff concessions for certain pallet trucks, following an application by Toyota Material Handling Australia on 4 January 2010. This instrument was enacted to ensure that these goods, which have a general duty rate of 5%, are subject to a duty-free rate, reflecting the policy objective of supporting industry sectors where Australian production does not currently meet demand.
Scope and Application
The Tariff Concession Instrument No. 1000199, made under Part XVA of the Customs Act 1901, applies specifically to the goods specified in the instrument, namely certain pallet trucks for which Toyota Material Handling Australia applied on 04 January 2010. The Act allows for the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) which provides for a lower rate of customs duty on these goods if certain criteria are met, as stipulated in sections 269C, 269D, and 269E of the Act. This instrument is effective for reducing the customs duty on these pallet trucks from the general rate of 5% to free, provided that the application for the TCO meets the core criteria and no substitutable goods are produced in Australia. The instrument's jurisdictional reach is national, applying across Australia in accordance with the Customs Act 1901. The TCO does not affect any existing rights or impose liabilities on any person other than the Commonwealth, and it does not disadvantage anyone who was in a particular position before the date of the application for the TCO. This legislation operates within the framework set out by the Customs Act 1901 and the Customs Tariff Act 1995, with any further details or specific exclusions governed by the conditions outlined in the primary acts and any subordinate legislation that may be enacted.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1000199, made under the Customs Act 1901, pertain to the application process and criteria for Tariff Concession Orders (TCOs) as outlined in sections 269C, 269F, and 269P(3). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO if the goods in question are not specified in section 269SJ, which details goods ineligible for TCOs. The CEO is required to determine if the application meets the core criteria, primarily established by section 269C, which mandates that no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are met, the CEO must make a written order (section 269P(3)) declaring that the goods are subject to a prescribed tariff item. In this case, the instrument declares that certain pallet trucks are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general 5% rate.
The Customs Act 1901 imposes several obligations and requirements on both the CEO and the applicant. For the CEO, it is crucial to ensure that the TCO application is valid and meets the core criteria outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia at the time of the application. The CEO must also publish a notice in the Gazette, inviting any interested party to submit objections or reasons why the TCO should not be granted (subsection 269K(1)). Should the CEO receive no submissions, the process can proceed to the issuance of the TCO. For the applicant, such as Toyota Material Handling Australia, the obligation lies in providing a detailed and accurate application, ensuring compliance with the conditions set out in the Act. This includes demonstrating that the goods are not substitutable by any Australian-produced equivalent.
Breach of the provisions under the Customs Act 1901 can lead to various civil or criminal consequences. Although the explanatory statement does not explicitly detail penalties for non-compliance, the Act generally provides for fines and imprisonment for offences related to the importation and exportation of goods. The maximum penalties can vary depending on the specific offence but often include significant fines and potential imprisonment terms. The Act's overarching purpose is to regulate and control the importation and exportation of goods, ensuring compliance with tariff concessions and other customs regulations. Failure to comply can result in legal action against the offending party, highlighting the importance of adhering to the statutory requirements.