EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516518
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.
Kid Australia Pty Ltd applied for a TCO in respect of certain electric key switches with a loom on 22 November 2005.
Instrument
TCO No 0516518 was made on 6 February 2006. It declares that those certain electric key switches with a loom 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. 0516518 is taken to have come into force on 22 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. 0516518, enacted under the Customs Act 1901, aims to provide relief to importers by reducing customs duty rates on specific goods. This legislation was introduced to address the need for concessional tariff rates for goods that do not have substitutable Australian-produced alternatives. By allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for such goods, the Act facilitates a more competitive market and supports the importation of necessary items. The policy objective is to ensure that the import of goods that are not produced domestically does not incur prohibitive duties, thereby encouraging trade and economic growth.
The instrument, which came into effect on 22 November 2005, was established following an application by Kid Australia Pty Ltd for tariff concessions on certain electric key switches with a loom. The Customs Act 1901 mandates that the CEO must determine whether an application meets the core criteria, which include the absence of substitutable goods produced in Australia. In this instance, the CEO concluded that no such substitutable goods were produced, leading to the issuance of TCO No. 0516518. This order declares that the specified electric key switches are subject to a zero percent duty rate, down from the general rate of 5 percent, benefiting importers who can now apply for duty refunds for goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0516518 under the Customs Act 1901 applies specifically to electric key switches with a loom, as determined by Kid Australia Pty Ltd's application to the Chief Executive Officer of Customs. This legislation enables the CEO to issue Tariff Concession Orders (TCOs) that reduce the customs duty on specified goods, provided certain conditions are met, such as the absence of substitutable goods produced in Australia. The geographic reach of this Act is national, as it pertains to federal customs laws in Australia. It does not disadvantage any person other than the Commonwealth and does not impose any new liabilities, while potentially benefiting importers by allowing them to apply for duty refunds on imports made since the effective date of the TCO. The Act's application can be extended or modified through subordinate instruments, ensuring its relevance and adaptability in various trade scenarios.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0516518 under the Customs Act 1901 (the Act) include sections 269F, 269C, 269P, and 269K. Section 269F allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C specifies that an application for a TCO meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P mandates that if the CEO is satisfied the application meets the core criteria, they must make a written order, declaring that the goods subject to the TCO application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). Finally, Section 269K requires the CEO to publish a notice in the Gazette inviting submissions on the TCO application as soon as practicable after accepting it as valid.
The obligations imposed by the Act on the parties or entities it governs include ensuring that the application for a TCO complies with the criteria set out in section 269C. Specifically, the applicant must demonstrate that no substitutable goods were produced in Australia in the ordinary course of business. Additionally, the CEO has an obligation to consider the application and decide whether it meets the core criteria. If the CEO is satisfied, they must make a written order in the form of a TCO. The CEO is also required to publish a notice in the Gazette, inviting submissions on the TCO application from any interested parties.
The Act imposes potential consequences for breaches, though specific offences and penalties are not detailed in the explanatory statement. However, it is reasonable to infer that any failure to comply with the requirements set out in the Act, such as submitting a false or misleading application, could result in civil or criminal penalties. The nature and severity of these penalties would likely depend on the specific breach and the discretion of the relevant authorities. While the explanatory statement does not provide specific maximum penalties, breaches of customs regulations generally carry significant fines and potential imprisonment, reflecting the seriousness with which such breaches are treated.