EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514066
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.
Tenix Defence Pty Ltd applied for a TCO in respect of certain DC Motors on 10 October 2005.
Instrument
TCO No 0514066 was made on 3 January 2006. It declares that those certain DC Motors 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. 0514066 is taken to have come into force on 10 October 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, provides a framework for the administration of customs and excise duties, among other things. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The objective of this legislative instrument is to address the issue of providing tariff concessions on certain goods, where applicable, to foster economic efficiency and competitiveness. The explanatory statement outlines the process and criteria for a TCO application, detailing the conditions under which a lower rate of customs duty can be applied to specified goods. In this instance, Tariff Concession Instrument No. 0514066 was issued on 3 January 2006, following an application by Tenix Defence Pty Ltd for certain DC Motors, resulting in a reduction of the duty rate from 5% to 0%. This concession aims to benefit importers by potentially allowing them to apply for a refund of duties paid on these goods since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0514066 is an application under the Customs Act 1901, specifically Part XVA, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument applies to entities or individuals who seek tariff concessions on specific goods, in this case certain DC Motors, provided that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. The geographic reach of this Act is national, applying to all entities within Australia seeking to import the specified goods. The application for a TCO is made under the authority of section 269F of the Customs Act 1901, and the CEO's decision to grant or deny the concession is based on the criteria outlined in sections 269C and 269SJ of the same Act. Notably, the TCO does not disadvantage any person or impose liabilities on any person except the Commonwealth, and it does not affect any rights as at the date of registration.
Section 269K(1) of the Customs Act 1901 requires the CEO to publish a notice in the Gazette inviting submissions from any person who may have objections to the concession being granted. In the case of TCO No. 0514066, no submissions were received. The commencement of this TCO is effective from the date the application was lodged, 10 October 2005, as per subsection 269S(1) of the Customs Act 1901. The TCO provides a benefit to importers by reducing the duty rate from 5% to 0% on the specified DC Motors. This reduction is contingent on the goods being imported and subject to the conditions outlined in the instrument. The Act allows for the extension or restriction of the application through subordinate instruments, providing flexibility in managing tariff concessions.
Key Provisions
The main operative sections of the Customs Act 1901, specifically as applied in Tariff Concession Instrument No. 0514066, include sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application is deemed valid and meets the core criteria outlined in section 269C, the CEO is required to make a TCO (section 269P). This order specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies and effectively alters the rate of customs duty for these goods. In this case, Instrument No. 0514066 declares that certain DC Motors are subject to a zero rate of duty, reducing it from the general rate of 5% as specified in the Tariff.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that any TCO application is valid and does not concern goods that cannot be subject to a TCO, as outlined in section 269SJ. The CEO must also confirm that no substitutable goods were produced in Australia on the day the application was lodged, in accordance with section 269C. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any interested parties who might oppose the TCO, as per subsection 269K(1). In this instance, the CEO did not receive any submissions in response to the notice.
Breaches of the provisions under the Customs Act 1901 can lead to various civil and criminal consequences. For example, failing to comply with the TCO or making false statements in an application could result in penalties. While the exact penalties are not specified in the explanatory statement, they generally include fines and potential imprisonment for more severe violations. It is also important to note that the Act ensures that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities for actions taken before the TCO's effective date. This protection ensures that the rights of importers and others are safeguarded, allowing them to benefit from the tariff concessions provided by the TCO.