EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515326
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.
Siemens Ltd applied for a TCO in respect of certain lead acid batteries on 03 November 2005.
Instrument
TCO No 0515326 was made on 23 January 2006. It declares that those certain lead acid batteries 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 free.
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. 0515326 is taken to have come into force on 03 November 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 provide a regulatory framework for the administration of customs duties and associated laws in Australia. This Act was introduced to address the need for a systematic approach to managing imports, exports, and related taxation, ensuring that the government could effectively regulate and tax goods entering and leaving the country. The Customs Act 1901 was enacted by the Australian Parliament with the policy objective of facilitating international trade while also protecting domestic industries and generating revenue through customs duties. One of the mechanisms established under the Act is the Tariff Concession Order (TCO) process, allowing the Chief Executive Officer of Customs to reduce or waive customs duties on certain goods under specific conditions. This process aims to support Australian industries by reducing the cost of imported raw materials or components, thus promoting competitiveness and economic growth.
Scope and Application
The Customs Act 1901, as amended through the Tariff Concession Instrument No. 0515326, facilitates the application of lower rates of customs duty on specified goods via Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import goods that are eligible for tariff concessions, provided that the goods are not listed in section 269SJ of the Act as those that cannot be subject to a TCO. The TCO applies to the importation of certain lead acid batteries in this instance, granting them a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, as opposed to the general rate of 5%. The Act covers all entities involved in the importation of these goods within the Australian jurisdiction, including importers who may benefit from the tariff concession. The scope of this legislation is limited to the specific goods mentioned in the TCO and does not extend to any other goods unless specifically included in a subsequent order. The TCO does not affect any pre-existing rights or impose liabilities on persons other than the Commonwealth concerning activities prior to the TCO's effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the process for Tariff Concession Orders (TCOs) that allow for reduced customs duty rates on certain goods. Section 269F allows individuals to apply to the Chief Executive Officer of Customs (CEO) for a TCO for particular goods. If the CEO determines that the application pertains to goods not excluded under section 269SJ, they must assess if the application meets the core criteria specified in section 269C. This requires that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
Upon satisfying these criteria, the CEO is mandated under section 269P(3) to issue a written TCO. This order declares that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with the associated duty rate. For instance, in TCO No. 0515326, certain lead acid batteries were granted a duty rate of free, down from the general rate of 5%. The CEO is also required under subsection 269K(1) to publish a notice in the Gazette inviting submissions from any party that may have reasons why the TCO should not proceed. In the case of Siemens Ltd’s application for lead acid batteries, no submissions were received.
The TCO, as per subsection 269S(1), is considered to come into force on the date the application was lodged. Therefore, TCO No. 0515326 became effective on 3 November 2005. Importantly, this order does not retroactively affect the rights of any person other than the Commonwealth, ensuring that no existing liabilities are imposed or rights are disadvantaged. Importers stand to benefit from this TCO, as they can apply for a refund of duty on goods imported since the effective date under paragraph 126(1)(r) of the Regulations.
Failure to comply with the obligations and requirements of the Customs Act 1901 and the associated Regulations can result in significant consequences. The Act and Regulations impose various offences and penalties for breaches, including both civil and criminal sanctions. For instance, under section 147 of the Customs Act 1901, the maximum penalty for knowingly making a false statement or providing false information can be a fine of up to 10,000 penalty units or imprisonment for up to five years, or both, for individuals. Corporations may face even higher penalties. Additionally, under section 148, failing to comply with certain provisions can lead to fines of up to 5,000 penalty units or imprisonment for up to two years, or both. These penalties underscore the importance of adhering to the statutory requirements and the potential severe repercussions for non-compliance.