EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603874
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.
Swan Imports Pty Ltd applied for a TCO in respect of certain solid state decouplers on 15 February 2006.
Instrument
TCO No 0603874 was made on 17 May 2006. It declares that those certain solid state decouplers 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. 0603874 is taken to have come into force on 15 February 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. 0603874, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods that are not produced domestically and thereby benefit importers by reducing customs duty rates. This instrument was created to streamline the process of applying for and receiving tariff concessions, ensuring that the application aligns with the core criteria set out in the Act. The instrument was introduced to facilitate the importation of certain solid state decouplers without imposing additional duties, thus encouraging trade and potentially reducing costs for importers. The Australian Government, through the Chief Executive Officer of Customs, established this instrument to meet these objectives and ensure that the tariff concessions are applied fairly and effectively.
Scope and Application
The Tariff Concession Instrument No. 0603874, made under the Customs Act 1901, applies to goods specified in the instrument, which in this instance are certain solid state decouplers. The application of this legislation is limited to the reduction of customs duty for these particular goods, provided that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The Act’s reach is national, operating within the framework of Australian customs legislation. The Chief Executive Officer of Customs has the authority to make such tariff concession orders, subject to certain criteria and exclusions as outlined in the Act. Notably, the legislation does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The TCO does not retroactively affect any pre-existing rights or impose liabilities for actions taken before its registration, ensuring that the rights of importers are beneficially impacted, particularly concerning the ability to apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
Section 269F of the Customs Act 1901 (the Act) allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application pertains to goods not specified in section 269SJ of the Act, which outlines goods ineligible for a TCO, the CEO must assess whether the application meets the core criteria set out in section 269C. This requires a determination that no substitutable goods, as defined in section 269D and produced in Australia in the ordinary course of business as per section 269E, were produced in Australia on the date the application was lodged. Should the application meet these criteria, the CEO must issue a written order in the form of a TCO, declaring that the goods in question are subject to a specified rate of customs duty as outlined in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed on the parties under the Customs Act 1901 include the requirement for the CEO to assess each TCO application against the stipulated criteria. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be granted, as per subsection 269K(1) of the Act. The CEO must consider all submissions received in response to the Gazette notice before making a final decision on the application. Additionally, the Act mandates that the CEO must ensure the rights of all parties, including importers, are not adversely affected by the TCO, particularly in relation to any actions taken prior to the TCO's effective date.
Any breach of the provisions outlined in the Customs Act 1901 may result in civil or criminal penalties. Although specific penalties are not detailed in the explanatory statement, under the general framework of Australian law, breaches of customs regulations can lead to fines and, in more severe cases, imprisonment. For instance, misleading or providing false information in an application for a TCO could be prosecuted under sections related to fraud or deception in customs matters, potentially leading to significant fines and imprisonment. The exact penalties would depend on the severity and intent behind the breach, as well as the specific provisions of the Customs Act 1901 and related legislation.