EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512621
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.
Nova Smic applied for a TCO in respect of certain Generators on 22 September 2005.
Instrument
TCO No 0512621 was made on 16 December 2005. It declares that those certain Generators 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. 0512621 is taken to have come into force on 22 September 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 was enacted to manage the import and export of goods into and out of Australia, including the imposition of customs duty. The Act provides a framework for Tariff Concession Orders (TCOs) under which the Chief Executive Officer of Customs may apply reduced rates of duty on certain goods. F2005L04184, a Tariff Concession Instrument, was introduced to address the specific needs of businesses seeking to import goods not produced domestically, thereby encouraging trade and competition. This instrument was enacted by the Parliament of Australia and aims to ensure that businesses can import goods without being unduly burdened by high customs duties, provided that no substitutable goods are produced in Australia. The policy objective is to facilitate trade by reducing the cost of importing goods, thereby supporting economic growth and consumer choice.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the procedure for making Tariff Concession Orders (TCOs) which apply lower rates of customs duty to specified goods. The Act applies to any person or entity that may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. This legislation is applicable on a national level, as it is a Commonwealth Act, and it extends to any goods imported into Australia. The Act applies to goods that are not specified in section 269SJ as those that cannot be subject to a TCO, and it is contingent on the CEO's satisfaction that no substitutable goods are produced in Australia at the time the application is lodged. The instrument, TCO No. 0512621, made on 16 December 2005, is an example of how the Act can be applied to specific goods, in this case, certain Generators, by reducing their duty rate from 5% to 0%. The TCO mechanism can be further detailed or restricted through subordinate instruments, although the primary criteria for TCOs are established within the Act itself.
Key Provisions
The Customs Act 1901, under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). A TCO reduces the customs duty on specific goods, as per section 269C, provided that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The definition of terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are clarified in sections 269D, 269E, and 269F of the Act. Once the CEO is satisfied that the application meets the core criteria, they must issue a written TCO (section 269P(3)).
The obligations imposed on parties under this legislation require the CEO to assess applications for TCOs and ensure that the goods in question meet the specified criteria. If the application is valid, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties (subsection 269K(1)). The TCO is effective from the date the application was lodged (subsection 269S(1)). In the case of TCO No. 0512621, Nova Smic's application for certain Generators was accepted, and the CEO determined that no substitutable goods were produced in Australia, thereby allowing the concession.
Failure to comply with the provisions of the Customs Act 1901 in relation to TCOs may result in various consequences. The Act does not specify particular offences, penalties, or consequences for non-compliance with TCO provisions; however, breaches of the Customs Act generally may be subject to penalties. For example, under section 244 of the Customs Act, a person found guilty of an offence against the Act may be liable for a penalty of up to $11,100 or imprisonment for up to 12 months, or both, for lesser offences. For more serious breaches, the penalties can be significantly higher, with potential penalties reaching up to $222,000 or imprisonment for up to 10 years, or both, depending on the severity of the breach. Additionally, civil consequences may include financial penalties or legal action for damages resulting from non-compliance.