EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411207
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.
Wholesale Appliance Distributors Pty Ltd applied for a TCO in respect of certain multimedia centres for motor vehicles on 28 October 2004.
Instrument
TCO No 0411207 was made on 4 January 2005. It declares that those certain multimedia centres for motor vehicles are goods to which item 50A 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 0%.
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.0411207 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, establishes a framework for the administration of customs duties and related measures. This Act facilitates the imposition of tariff concessions on certain goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These concessions aim to reduce the customs duty on specific goods, provided they meet the criteria set forth in the Act, thereby encouraging the import of goods that are not produced domestically or for which no suitable domestic substitutes exist. The introduction of this legislative instrument addresses the need for a streamlined process to grant tariff concessions, aiming to benefit importers and potentially stimulate economic activity by making imported goods more competitively priced. The policy objective is to facilitate the efficient and fair administration of customs duties while supporting trade and commerce.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be implemented by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking to import specific goods into Australia and who wish to take advantage of reduced customs duties provided through TCOs. The legislation is primarily concerned with the application of a lower rate of customs duty on goods that are the subject of a TCO. The Act delineates strict criteria that must be met for a TCO to be considered, including ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged. The TCO scheme is a Commonwealth-level regulation, applying across Australia, and is designed to benefit importers by reducing the duty rate on certain goods, thereby enhancing their competitiveness. However, there are exclusions under section 269SJ of the Act, which specifies goods that cannot be subject to a TCO. The application of this Act can be further defined and extended through subordinate instruments, providing flexibility and specificity to the legislative framework.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0411207 are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C sets out the core criteria that a TCO application must meet, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P mandates that if the CEO is satisfied the application meets the core criteria, a written TCO must be made. Finally, section 269S specifies that the TCO comes into force on the day the application was lodged. This TCO was made in respect of certain multimedia centres for motor vehicles, reducing the customs duty from 5% to 0% (section 269P(3)).
The obligations and requirements imposed by the Act on the parties involved are primarily administrative. The CEO of Customs must ensure that a TCO application meets the core criteria set out in section 269C and that no submissions objecting to the TCO are received within the specified timeframe (subsection 269K(1)). Once the CEO determines that the application meets the core criteria, a TCO must be issued (section 269P(3)). Wholesale Appliance Distributors Pty Ltd, the applicant, must provide sufficient information to enable the CEO to make this determination. Furthermore, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any interested party to object to the TCO. In this instance, no objections were received.
The Customs Act 1901 and associated regulations establish specific penalties and consequences for breaches of the Act. However, the explanatory statement does not specify penalties for breaches related to Tariff Concession Orders. Generally, the Act provides for civil and criminal penalties for breaches, including fines and imprisonment. For instance, section 144 of the Customs Act 1901 imposes a maximum penalty of $11,000 or three years imprisonment, or both, for offences involving the making of false statements or representations. In the context of TCOs, non-compliance with the terms of the order could potentially lead to penalties for incorrect duty declarations or other customs-related offences. The specifics of penalties for breaches of TCOs would need to be determined in the broader context of the Customs Act 1901 and any relevant regulations.