EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516745
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.
Beaver Sales Pty Ltd applied for a TCO in respect of certain descent controllers on 2 December 2005.
Instrument
TCO No 0516745 was made on 13 February 2006. It declares that those certain descent controllers 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. 0516745 is taken to have come into force on 2 December 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, enacted by the Parliament of Australia, establishes a framework for the imposition of customs duties, including provisions for Tariff Concession Orders (TCOs) to provide relief from certain duties under specific conditions. The 2006 Tariff Concession Instrument No. 0516745 was introduced to address the need for concessional tariffs for specific goods not produced domestically. In this instance, the instrument was made in response to an application by Beaver Sales Pty Ltd for certain descent controllers, which were not being produced in Australia. The objective of the TCO is to reduce the duty on these imported goods from 5% to free, thereby facilitating their importation while ensuring no detriment to domestic producers or existing rights of importers who can seek duty refunds for relevant imports.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the framework under which Tariff Concession Orders (TCOs) are granted by the Chief Executive Officer of Customs (CEO). This Act applies to individuals or entities that wish to apply for a TCO in respect of goods that are not specified in section 269SJ of the Act. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, as per section 269C. The application must be made in writing and will only be considered if it meets the core criteria outlined in the Act. The TCO’s geographic reach is national, as it applies across Australia and is administered at a federal level by the CEO. The instrument extends its application to all importers of the specified goods, providing them with tariff concessions, but does not disadvantage or impose liabilities on any person in respect of actions taken prior to the TCO’s effective date. The application of the TCO is further refined through subordinate instruments, which can provide additional criteria or conditions under which the TCO applies.
Key Provisions
The main operative sections of the Customs Act 1901, particularly section 269F, allow for the application for Tariff Concession Orders (TCO) by any person seeking to have a lower rate of customs duty applied to specified goods. If the Chief Executive Officer of Customs (CEO) is satisfied that the application is valid and meets the core criteria outlined in section 269C, the CEO is mandated to make a written order (TCO) that declares the goods subject to the order as qualifying for a specified item of Schedule 4 to the Customs Tariff Act 1995. This means that the goods specified in the TCO will be subject to a prescribed rate of duty, potentially free of charge, as was the case in TCO No. 0516745.
The Act imposes several obligations on the parties involved. Firstly, the CEO must ensure that any TCO application does not pertain to goods specified in section 269SJ, which are ineligible for tariff concessions. The CEO must also confirm that no substitutable goods were produced in Australia on the date the application was lodged, as per section 269C. Additionally, section 269K requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO if they believe it should not proceed. Furthermore, the CEO must make a TCO if the application meets the criteria stipulated in section 269P(3).
There are consequences for breaches of the Act. While the explanatory statement does not detail specific offences or penalties related to TCOs, general provisions of the Customs Act 1901 and associated regulations would apply. Breaches of the Act or regulations can lead to civil or criminal penalties, which may include fines and imprisonment. For instance, providing false information in an application could lead to prosecution under the general false statements provisions of the Act. The maximum penalties would depend on the specific offence and the discretion of the court.
In summary, the Customs Act 1901, through sections such as 269F, 269C, and 269K, provides a structured process for applying for and granting tariff concessions on specified goods. The CEO has clear obligations to assess applications and publish notices, while applicants must ensure their applications meet the stipulated criteria. Any breaches of the Act may result in civil or criminal penalties, underscoring the importance of compliance with the legislative requirements.