EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515716
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.
Exide Australia Pty Ltd applied for a TCO in respect of certain 2 volt accumulator lids on 10 November 2005.
Instrument
TCO No 0515716 was made on 30 January 2006. It declares that those certain 2 volt accumulator lids 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. 0515716 is taken to have come into force on 10 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 Tariff Concession Instrument No. 0515716, enacted in 2006 under the Customs Act 1901, addresses the need to provide tariff concessions on specific imported goods. This legislative instrument was developed to facilitate the application process for Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act. The policy objective is to lower customs duty rates on certain goods, provided they meet the core criteria, which includes ensuring no substitutable goods are produced in Australia. The instrument was enacted by the Chief Executive Officer of Customs (CEO) following an application from Exide Australia Pty Ltd for a TCO on certain 2 volt accumulator lids. The CEO determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for a tariff concession, and subsequently issued TCO No. 0515716. This order declares that these goods are subject to a lower rate of duty, specifically, a duty-free status. The rights of importers will be positively affected as they may apply for a refund of duty on goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0515716 under the Customs Act 1901 applies to the specific case of Exide Australia Pty Ltd's application for tariff concessions on certain 2 volt accumulator lids. This Act pertains to the process by which the Chief Executive Officer of Customs (CEO) can reduce customs duties on goods, provided certain criteria are met and the goods are not excluded under section 269SJ. The application process requires that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business. Upon meeting these criteria, the CEO must issue a Tariff Concession Order (TCO), which in this case resulted in the 2 volt accumulator lids being subject to a duty rate of free, down from the general rate of 5%. The scope of this particular TCO is limited to the goods specified in the application, and it does not affect any pre-existing rights or liabilities of parties other than the Commonwealth. Additionally, the TCO is effective from the date the application was lodged, which in this instance was 10 November 2005.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, which provide for lower rates of customs duty on specified goods. Section 269F of the Act allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed tariff item, as specified in section 269P(3). Section 269C of the Act states that the core criteria are met if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. "Substitutable goods" are defined in section 269B as goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put.
The Act imposes certain obligations on parties seeking a TCO. Section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application. This notice includes an invitation to any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, the CEO did not receive any submissions in response to this invitation. Once a TCO is made, section 269S(1) provides that it is taken to have come into force on the day on which the application for the TCO was lodged. 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.
Breaches of the Act or non-compliance with its provisions can lead to various consequences. Although the specific offences, penalties, or consequences for breach of a TCO are not detailed in the Act, breaches of the Customs Act 1901 generally can lead to civil or criminal penalties. For example, under section 140 of the Act, a person who contravenes the Act may be liable for a civil penalty of up to $22,200 for a corporation and $4,400 for an individual, or imprisonment for up to two years, or both. Additionally, under section 141 of the Act, a person who is found guilty of an offence against the Act may be liable for a fine of up to $275,000 for a corporation and $55,000 for an individual. These penalties may vary depending on the specific breach and the circumstances of the case.