EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516888
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.
Point Trading Pty Ltd applied for a TCO in respect of certain military weapons parts on 30 November 2005.
Instrument
TCO No 0516888 was made on 13 February 2006. It declares that certain military weapons parts 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. 0516888 is taken to have come into force on 30 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for administering customs and excise duties, including the imposition of tariff concessions on specific goods. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under Part XVA, reducing the duty on certain goods when no substitutable goods are produced in Australia. The purpose of the Act is to streamline the process for applying for tariff concessions and to ensure that the application process is transparent and accessible. In this context, TCO No. 0516888 was introduced to provide a tariff concession on certain military weapons parts, recognising that no substitutable goods were produced domestically. The policy objective is to facilitate the import of these specific goods by removing customs duty, thereby supporting trade and economic activity. The TCO came into force on the date the application was lodged, without affecting the rights of any person as at the registration date.
Scope and Application
The Customs Act 1901, through Part XVA, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that lower the customs duty rate on specified goods, provided certain conditions are met. The Act applies to any person or entity seeking a TCO for goods, ensuring the application complies with the criteria such as the absence of substitutable goods produced in Australia. The Act has a national reach, governing the tariff concession scheme across Australia. Notably, certain goods are excluded from TCO consideration under section 269SJ of the Act. The CEO must consider applications against the criteria stipulated in sections 269C, 269B, and 269D, ensuring no substitutable goods are produced in Australia in the ordinary course of business. TCOs are made under the authority provided by section 269F and come into force on the date the application is lodged as per section 269S(1). TCO No. 0516888, made on 13 February 2006, provides a tariff concession for certain military weapons parts, setting the duty rate to free, as the CEO found no substitutable goods were produced in Australia. This TCO does not disadvantage any person and allows importers to apply for duty refunds under the Customs Tariff Act 1995.
Key Provisions
The Tariff Concession Instrument No. 0516888, made under the Customs Act 1901, specifies that certain military weapons parts are subject to a tariff concession order (TCO) (Section 269P(3)). The general duty on these goods, which is typically 5%, is reduced to free of charge as a result of this concession (Schedule 4, item 50 of the Customs Tariff Act 1995). The TCO was made on 13 February 2006, following an application by Point Trading Pty Ltd on 30 November 2005. The Chief Executive Officer of Customs (CEO) determined that the application met the core criteria as no substitutable goods were produced in Australia on the date the application was lodged (Sections 269C and 269D).
The Act imposes certain obligations on the CEO and applicants for TCOs. Once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be granted (Subsection 269K(1)). In this case, no submissions were received. Additionally, the CEO must ensure that the application does not pertain to goods specified in Section 269SJ of the Act, which are ineligible for a TCO. The CEO must also decide whether the application meets the core criteria as outlined in Section 269C, which involves confirming that no substitutable goods were produced in Australia on the date of the application.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. If an entity does not adhere to the stipulated conditions for a TCO application, the CEO may refuse to grant the concession. While the Act does not explicitly detail specific penalties for non-compliance, breaches of customs regulations generally may result in civil or criminal penalties under other sections of the Act. These could include fines, imprisonment, or other sanctions as deemed appropriate by the court.
The TCO does not affect the rights of any person, except the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken prior to the date of registration (Subsection 269S(1)). Importers of the affected goods, however, stand to benefit from this concession as they can apply for a refund of duty on goods imported since the TCO came into effect on 30 November 2005 (Regulation 126(1)(r)). Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth.