EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516611
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 housing on 22 November 2005.
Instrument
TCO No 0516611 was made on 6 February 2006. It declares that those certain electric key switches with a housing 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. 0516611 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. 0516611 was enacted in 2006 under the Customs Act 1901 to provide tariff concessions for specific goods, thereby addressing the need for reduced customs duty rates on imported goods that are not produced domestically and for which there are no suitable domestic alternatives. This instrument was introduced to facilitate the import of certain electric key switches with a housing, which were not being produced in Australia, thereby enabling the duty-free importation of these goods. The instrument was made by the Chief Executive Officer of Customs in response to an application by Kid Australia Pty Ltd. The policy objective was to ensure that such tariff concessions do not disadvantage existing stakeholders and to provide a mechanism for importers to seek refunds on duties already paid prior to the concession being effective. The instrument became effective on the date of the application, 22 November 2005, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0516611, made under the Customs Act 1901, applies to specific electric key switches with a housing by providing a concession on customs duty for these goods. The application of this Act is targeted towards entities that import these particular goods into Australia, granting them a lower rate of customs duty as specified in the Tariff Concession Order (TCO). This Act is applicable nationally across Australia, as it is an instrument made under Commonwealth legislation. The TCO No. 0516611 was made on 6 February 2006, and it came into effect on the date the application was lodged, which was 22 November 2005. The legislation does not impose any liabilities on any person and does not disadvantage anyone who had rights as of the date of registration. Importers can benefit from this Act by applying for a refund of duty on goods imported since the effective date of the TCO. The scope of this Act is limited to the goods specified in the application and does not extend to any other goods unless specifically covered by a different TCO.
Key Provisions
The primary operative sections of this legislation, specifically Tariff Concession Order No. 0516611, are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), while section 269C specifies the core criteria that must be satisfied for the application to be approved. If the CEO determines that the application meets these criteria, they must issue a written TCO as per section 269P(3). This TCO applies a lower rate of customs duty to the specified goods, in this case, certain electric key switches with a housing. Section 269SJ outlines the goods that are ineligible for a TCO.
The Act imposes several obligations on the parties involved. Firstly, the CEO is required to assess the validity of any TCO application against the core criteria set out in section 269C. If the CEO finds that the application meets these criteria, they must proceed to issue a TCO, as mandated by section 269P(3). Additionally, the CEO is obligated to publish a notice in the Gazette, inviting any interested parties to submit objections to the proposed TCO, as per section 269K(1). In this instance, no objections were received, and the TCO was issued accordingly.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various penalties and legal consequences. While the explanatory statement does not detail specific penalties for non-compliance with TCO provisions, general provisions of the Customs Act may apply. Breaches of the Customs Act can result in criminal charges, fines, and imprisonment. For instance, under section 232 of the Act, a person who knowingly makes a false statement in a document for the purposes of avoiding duty can be fined up to $22,000 or imprisoned for up to five years, or both. Civil penalties can also be imposed for breaches of customs regulations, which may include additional fines and the recovery of unpaid duties.
In summary, Tariff Concession Order No. 0516611 effectively reduces the customs duty on certain electric key switches with a housing, provided the CEO is satisfied that no substitutable goods are produced in Australia. The Act outlines clear procedures for application and approval, as well as obligations for the CEO to consider objections. Non-compliance with the Act’s requirements can lead to serious civil and criminal penalties, underscoring the importance of adhering to the prescribed processes and criteria.