EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602557
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.
Dept of Defence applied for a TCO in respect of certain weapons positioners on 18 January 2006.
Instrument
TCO No 0602557 was made on 18 April 2006. It declares that those certain weapons positioners 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 0%.
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. 0602557 is taken to have come into force on 18 January 2006.
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. 0602557, enacted in 2006 under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods that are not produced domestically in a substitutable form. This instrument was introduced by the Chief Executive Officer of Customs (CEO) in response to an application from the Department of Defence. The objective of this legislation is to lower the customs duty on certain weapons positioners to zero percent, as no equivalent goods are produced in Australia, thereby supporting the importation of these critical defence items without financial burden. The CEO was satisfied that the application met the core criteria as outlined in section 269C of the Customs Act, and no submissions were received in opposition to the tariff concession. The instrument came into effect on the date the application was lodged, ensuring that the rights of importers are positively affected, and no new liabilities are imposed on any parties.
Scope and Application
The Tariff Concession Instrument No. 0602557, made under Part XVA of the Customs Act 1901, applies to the goods specifically identified in the instrument, which are certain weapons positioners. The instrument was made in response to an application from the Department of Defence on 18 January 2006, and it came into force on the same date. The instrument provides that these particular weapons positioners are subject to a tariff concession order (TCO), meaning that they are eligible for a reduced rate of customs duty. The Chief Executive Officer of Customs determined that the application met the core criteria, as no substitutable goods were produced in Australia on the date the application was lodged, and subsequently made the TCO on 18 April 2006. The TCO provides for a 0% duty rate on these goods, down from the general rate of 5%. Importantly, the TCO does not disadvantage any person or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration, and it beneficially affects the rights of importers who can apply for a refund of duty on goods imported since the day the TCO came into force.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0602557 pertain to the establishment of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application meets the core criteria specified in section 269C, the CEO is mandated to make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, which, in this instance, results in a 0% duty rate for certain weapons positioners. The core criteria, as defined in section 269C, require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties involved are stringent yet straightforward. The CEO of Customs must rigorously assess each application to ensure it meets the core criteria before making any TCO. This includes ensuring that no substitutable goods were produced in Australia at the time of application, as outlined in section 269C. Furthermore, under section 269K(1), the CEO is required to publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, the CEO did not receive any submissions, streamlining the process.
In terms of civil and criminal consequences for breach, the Customs Act 1901 does not explicitly outline specific offences or penalties for failing to comply with a TCO. However, any breach of the Customs Act, including improper claims for tariff concessions, could potentially lead to enforcement actions by Customs. Such actions might include fines or other administrative penalties. The general legal framework surrounding customs duties and tariff concessions is robust, ensuring compliance and discouraging non-compliance through potential financial and legal repercussions.