EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411197
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.
Basslink Pty Ltd applied for a TCO in respect of certain ac circuit breakers on 28 October 2004.
Instrument
TCO No 0411197 was made on 4 January 2005. It declares that those certain ac circuit breakers 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 3%.
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.0411197 is taken to have come into force on 28 October 2004.
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 regulation of imports and exports, including the imposition of customs duties. To address gaps in the duty scheme and facilitate trade, Part XVA of the Act allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can reduce the rate of customs duty on specified goods, provided that no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0411197, made on 4 January 2005, is an example of such an order, reducing the duty on certain AC circuit breakers from 5% to 3%. The policy objective is to ensure that Australian consumers and businesses can access goods at a reduced cost, thereby promoting economic efficiency and trade. The instrument came into effect on the date the application was lodged, 28 October 2004, and no submissions were received in opposition to the order.
Scope and Application
The Tariff Concession Instrument No. 0411197 applies to Basslink Pty Ltd and specifically to certain ac circuit breakers that are subject to a Tariff Concession Order (TCO) under the Customs Act 1901. This Act operates at the Commonwealth level, meaning its jurisdiction extends across Australia. The TCO is applicable to goods that are the subject of the concession, ensuring that these particular goods attract a lower rate of customs duty than the general rate specified in the Customs Tariff Act 1995. The instrument was made by the Chief Executive Officer of Customs, following an application from Basslink Pty Ltd, and it specifies that these circuit breakers will be subject to a 3% duty rate instead of the usual 5%. The Act allows for the application of TCOs for goods not produced in Australia in the ordinary course of business, and the CEO must ensure no substitutable goods exist in Australia before approving the concession. The commencement of this TCO is considered to be from the date of the application, 28 October 2004, and it does not affect the rights of any person adversely if they were incurred before this date. This instrument extends the application of the Customs Act by providing specific relief on duty rates for certain goods, as authorised under section 269F of the Act.
Key Provisions
The Tariff Concession Instrument No. 0411197, made under the Customs Act 1901, establishes a lower rate of customs duty for certain ac circuit breakers specified in the instrument. This concession is applicable to goods that meet the criteria outlined in the Act. According to section 269F, an application for a Tariff Concession Order (TCO) can be made by a person to the Chief Executive Officer (CEO) of Customs. If the CEO determines that the application pertains to goods that are not specified in section 269SJ of the Act, which includes goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria. Section 269C of the Act states that the application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties governed by it include the requirement for the CEO to decide on the validity of a TCO application based on whether it meets the core criteria. As per section 269K(1), once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on why the TCO should not be made. In this instance, the CEO did not receive any submissions opposing the TCO. Additionally, under section 269S(1), a TCO is deemed to have come into force on the day the application for the TCO was lodged, meaning that TCO No. 0411197 is effective from 28 October 2004. Importantly, the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration in a manner that would disadvantage that person or impose liabilities for actions taken before the registration date.
The Act imposes specific consequences for breaches of its provisions. Although the explanatory statement does not detail specific offences or penalties for non-compliance with the TCO, it is reasonable to infer that breaches of the Customs Act 1901, including failure to adhere to the terms of a TCO, may result in legal action. Under the Customs Act, contraventions can lead to civil or criminal penalties. For instance, civil penalties may include fines, while criminal penalties can result in imprisonment, reflecting the seriousness with which breaches of customs regulations are treated. The exact penalties would depend on the nature and severity of the breach, as well as the specific provisions of the Customs Act and related legislation.