EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510333
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.
Eaton Pty Ltd applied for a TCO in respect of certain Overhaul or Rebuild Kits on 5 August 2005.
Instrument
TCO No 0510333 was made on 21 October 2005. It declares that those certain Overhaul or Rebuild Kits 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 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. 0510333 is taken to have come into force on 5 August 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 Tariff Concession Instrument No. 0510333, enacted in 2005 under the Customs Act 1901, addresses the need for a streamlined process to provide tariff concessions for specific imported goods, facilitating trade by reducing customs duty rates for those goods. This instrument was introduced by the Australian Government, specifically by the Chief Executive Officer of Customs, to meet the criteria outlined in the Act for granting tariff concessions. The primary policy objective is to ensure that the application of tariff concessions does not disadvantage Australian producers by allowing such concessions only when no substitutable goods are produced domestically.
This instrument was developed in response to an application by Eaton Pty Ltd for tariff concessions on certain Overhaul or Rebuild Kits, which were granted after it was determined that no equivalent goods were being produced in Australia. The Customs Act 1901 provides the framework for such concessions, stipulating that the application process includes public consultation and that the concessions take effect from the date of application. The introduction of this instrument aims to benefit importers by potentially reducing their duty liabilities and allowing them to seek refunds for duties paid on imports since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0510333 under the Customs Act 1901 applies to individuals and entities that seek a tariff concession on certain goods, specifically Overhaul or Rebuild Kits, to reduce the customs duty rate from the general 5% to 0%. This instrument is applicable across Australia, extending the provisions of the Customs Act to facilitate reduced duty rates for specified goods as determined by the Chief Executive Officer of Customs. The scope of the Act encompasses all entities and individuals involved in the importation of these goods, ensuring they benefit from the reduced duty rate as long as the goods meet the criteria outlined in the Act, including the absence of substitutable goods produced in Australia. The Act operates on a national level, thereby affecting all states and territories within Australia. While the Act provides for the reduction of customs duties, it explicitly excludes goods specified in section 269SJ of the Customs Act, which are not eligible for tariff concessions. The Act’s application may be further refined through subordinate instruments, allowing for adjustments and expansions to the types of goods eligible for tariff concessions.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0510333 include section 269F, which allows for the application of a Tariff Concession Order (TCO) by a person to the Chief Executive Officer of Customs (CEO) (section 269F). The core criteria for a TCO application, outlined in section 269C, require that on the date of application, no substitutable goods are produced in Australia in the ordinary course of business (section 269C). Substitutable goods, as defined in section 269D, are those that could be produced in Australia and serve a use similar to the goods in question. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO (section 269P(3)).
The obligations imposed by this legislation include the requirement for the CEO to consider the application and decide whether it meets the core criteria. If the application is deemed valid, the CEO must issue the TCO and publish a notice in the Gazette inviting any objections (subsection 269K(1)). The CEO is also mandated to ensure that the TCO does not disadvantage any person by affecting their rights as of the date of registration or imposing liabilities for actions taken before the registration date (subsection 269S(1)).
Failing to comply with the provisions of the Customs Act 1901 can result in various civil or criminal consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of customs regulations typically involve substantial penalties. For example, under section 279 of the Customs Act 1901, individuals or entities found guilty of certain customs offences may face fines of up to $22,000 or imprisonment for up to five years, or both. The precise penalties depend on the nature and severity of the breach.