EXPLANATORY STATEMENT
Tariff Concession Instrument No.0500118
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.
Blue Mountains Imports & Exports Pty Ltd applied for a TCO in respect of certain DC motors and battery chargers on 6 January 2005.
Instrument
TCO No 0500118 was made on 18 March 2005. It declares that those certain DC motors and battery chargers 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. 0500118 is taken to have come into force on 6 January 2005.
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 provides for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act aims to address the gap in duty-free concessions for specific imported goods by allowing for lower rates of customs duty under certain conditions. The purpose of the Tariff Concession Instrument No. 0500118 is to facilitate tariff concessions for certain DC motors and battery chargers, reducing their customs duty rate from the general rate of 5% to a concessional rate of 3%, effective from the date of the application, 6 January 2005. This legislative instrument was introduced to ensure that no substitutable goods were produced in Australia at the time of the application, thus meeting the core criteria set out in the Customs Act. The instrument ensures that the rights of importers are beneficially affected, allowing them to apply for refunds of duty on these goods imported since the effective date.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides a mechanism for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to certain goods. The act applies to any person or entity that imports goods eligible for a TCO, provided that the goods are not specified as ineligible under section 269SJ of the Act. The CEO must determine whether an application meets the core criteria, primarily assessed by whether substitutable goods are produced in Australia, as outlined in sections 269C, 269D, and 269E. Once an application is approved and a TCO is issued, it applies retroactively to the date of application lodgement, as per subsection 269S(1). The CEO must also publish a notice in the Gazette inviting objections to the TCO, although no objections were raised for TCO No. 0500118, which concerns certain DC motors and battery chargers. This TCO does not affect existing rights or impose new liabilities, and importers can apply for duty refunds on imports since the effective date of the TCO.
Key Provisions
The primary sections of this instrument are sections 269C, 269P, and 269S of the Customs Act 1901, which outline the process for the application and determination of Tariff Concession Orders (TCOs). Section 269C sets out the core criteria that an application must meet for a TCO to be granted, which is that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (subsection 269C(1)). Section 269P details the process for the Chief Executive Officer of Customs (CEO) to follow if the application meets the core criteria, requiring the CEO to make a written order (TCO) (subsection 269P(3)). Section 269S(1) specifies that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged.
The obligations and requirements imposed by this Act on the parties it governs are primarily on the CEO, who must ensure that any TCO application is assessed against the core criteria outlined in section 269C. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any interested parties to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). If the CEO is satisfied that the application meets the core criteria, they must make a written TCO declaring that the goods subject to the application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)). Additionally, any person who considers that there are reasons why the TCO should not be made must have the opportunity to lodge a submission with the CEO, although in this case, no submissions were received.
There are no specific offences or penalties mentioned in the explanatory statement for breaches of the Act in the context of this TCO. However, it is important to note that the Act and associated regulations provide for general penalties for breaches of customs laws, which can include both civil and criminal penalties. Civil penalties may include fines and pecuniary penalties, while criminal penalties may include imprisonment, depending on the severity and nature of the breach. The maximum penalties for breaches of customs laws can vary widely based on the specific offence and circumstances of the case, as detailed in the Customs Act 1901 and the Customs Regulation 1993.