EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515973
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 pillar bolts on 14 November 2005.
Instrument
TCO No 0515973 was made on 03 February 2006. It declares that those certain 2 volt accumulator pillar bolts 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 10%. 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. 0515973 is taken to have come into force on 14 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. 0515973, made in 2006 under the Customs Act 1901, addresses the need to provide tariff concessions for specific imported goods where no equivalent or substitutable goods are produced in Australia. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions to applicants who meet certain criteria, particularly focusing on goods that are not domestically produced in a way that substitutes the imported goods. The policy objective is to ensure that tariff concessions are granted fairly and only when there is no Australian production that can replace the imported goods, thereby protecting local industries while providing benefits to importers.
The enactment of this instrument by the relevant authority follows a formal application process, requiring publication in the Gazette to allow for public consultation. In the case of Exide Australia Pty Ltd's application for tariff concessions on certain 2 volt accumulator pillar bolts, the CEO determined that no substitutable goods were produced in Australia, leading to the concession that reduced the duty rate from 10% to free. This concession came into effect on the date of the application, 14 November 2005, and allows for duty refunds for importers who have already imported the goods since that date.
Scope and Application
The Tariff Concession Instrument No. 0515973 applies to the specific goods identified in the Instrument, namely certain 2 volt accumulator pillar bolts, and is governed under the Customs Act 1901. The legislation is applicable to any person or entity that applies for and is granted a Tariff Concession Order (TCO) in respect of these goods. The scope of the Act is limited to the goods specified in the TCO, and it is not applicable to any other goods not listed therein. The Act operates within the Commonwealth jurisdiction and aims to provide tariff concessions on specific goods to ensure they are not subject to customs duty, provided they meet the criteria outlined in the Act. The Act does not explicitly state any exclusions or exemptions other than the goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application and interpretation of the Act may be extended or restricted through subordinate instruments, as indicated by the reference to the Customs Tariff Act 1995.
Key Provisions
The main operative sections of the Customs Act 1901 concerning Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods, provided the goods are not specified in section 269SJ. Section 269C outlines the core criteria that a TCO application must meet, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, and Section 269S provides for the effective date of a TCO, which is the date the application was lodged.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs, who must assess whether a TCO application meets the core criteria and make a written order if it does. The Act also requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In the case of TCO No. 0515973, the CEO did not receive any submissions. Additionally, the Act mandates that a TCO does not affect the rights of any person as at the date of registration in a manner that would disadvantage them or impose liabilities for actions taken before the registration date.
The Act does not explicitly detail specific offences or penalties for breaches of the provisions concerning TCOs. However, any failure to comply with the Act’s requirements could potentially lead to legal challenges or administrative consequences, such as the TCO being contested or revoked if it is found that the CEO did not correctly apply the Act's provisions. The Customs Act 1901 generally outlines various offences and penalties related to customs duties and related activities, but these are not specifically tied to the TCO process in the sections referenced here. Therefore, while there are no maximum penalties explicitly stated in the sections concerning TCOs, breaches of the Customs Act could attract penalties under other sections of the Act.