EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1130841
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.
Schindler Lifts Australia Pty Ltd applied for a TCO in respect of certain digital soft starters on 09 September 2011.
Instrument
TCO No 1130841 was made on 05 December 2011. It declares that those certain digital soft starters 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. 1130841 is taken to have come into force on 09 September 2011.
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 Commonwealth Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These TCOs enable a reduced rate of customs duty for specific goods, thereby promoting economic efficiency and fair trade practices. The Act was introduced to address the need for a streamlined process to reduce customs duties on goods that are not produced domestically or do not have suitable domestic substitutes. This mechanism is designed to benefit importers by lowering their costs and potentially increasing the competitiveness of the goods in the domestic market. As per the explanatory statement for Tariff Concession Instrument No. 1130841, Schindler Lifts Australia Pty Ltd successfully applied for a TCO concerning certain digital soft starters, resulting in a tariff reduction from the general rate of 5% to a zero rate. The instrument was effective from the date of the application, 9 September 2011, and no objections were raised during the consultation period.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This act applies to any person who may apply for a TCO concerning specific goods. A TCO allows for a lower rate of customs duty on goods specified in the order, provided the CEO determines that the application meets the core criteria, including that no substitutable goods are produced in Australia in the ordinary course of business. This legislation operates nationally, under the Commonwealth jurisdiction. The act does not apply to goods specified in section 269SJ of the Customs Act 1901, which outlines those goods that cannot be subject to a TCO. The CEO must publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is deemed valid, although in this case, no submissions were received. The TCO is considered effective from the date the application was lodged, in this instance, 09 September 2011, and it does not affect the rights of any person to disadvantage them or impose liabilities for actions taken before the date of registration.
Key Provisions
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) which apply lower rates of customs duty to certain goods. A TCO can be applied for under section 269F if the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. To meet the core criteria, as outlined in section 269C, the goods must not have substitutable goods produced in Australia on the day the application was lodged. The definitions of terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively. If the CEO is satisfied that the application meets these criteria, a TCO must be made under section 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on the parties under the Act include ensuring that the goods in question do not have substitutable goods produced in Australia, and that the application complies with all necessary criteria and definitions. The CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting submissions on the application. In the case of Schindler Lifts Australia Pty Ltd's application for a TCO on certain digital soft starters, no submissions were received, and the TCO was made on 05 December 2011. The TCO came into force on the date of application, 09 September 2011, under subsection 269S(1), and it does not affect any rights of persons other than the Commonwealth or impose any liabilities on any person.
The Act does not explicitly state offences, penalties, or consequences for breaches related to TCOs. However, it is implied that failure to comply with the terms and conditions set out in the Act could potentially lead to legal consequences, such as challenges to the validity of the TCO or disputes regarding the application of customs duty rates. Importers can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations. The specific penalties for non-compliance are not detailed within this particular legislative excerpt.